EXHIBIT 10.1(1)
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made
and dated as of the 27th day of June, 1997, by and among BANKBOSTON, N.A.,
formerly known as The First National Bank of Boston ("BankBoston"), and THE
SUMITOMO BANK OF CALIFORNIA ("Sumitomo") (BankBoston, Sumitomo and those other
lenders from time to time party hereto being referred to herein individually as
a "Bank" and, collectively, as the "Banks"), BANKBOSTON, as the successor agent
for the Banks (in such capacity, the "Agent"), SUMITOMO, as the successor
security agent (in such capacity, the "Security Agent"), CHART HOUSE, INC. (the
"Company"), CHART HOUSE ENTERPRISES, INC. (the "Parent") and BIG WAVE, INC.
("Big Wave") (the Parent and Big Wave being sometimes referred to herein,
jointly and severally, as the "Guarantors").
RECITALS
A. Pursuant to that certain Amended and Restated Revolving Credit and Term
Loan Agreement dated as of December 17, 1993 by and among the Company, the
Guarantors, Paradise Bakery, Inc., the banks party thereto (including BankBoston
and Sumitomo) and BankBoston as the original "Agent" thereunder (as amended to
date, including, without limitation, pursuant to that certain Consent to
Disposition and Agreement for Substitution of Collateral, dated as of May 30,
1996 and that certain waiver and amendment letter dated August 14, 1996, the
"Existing Credit Agreement"), the banks party thereto agreed to extend credit to
the Company on the terms and subject to the conditions set forth therein.
B. Pursuant to that certain Amendment No. 2 dated as of April 26, 1995
BankBoston resigned as Agent and Security Agent under the Existing Credit
Agreement and Sanwa Bank California ("Sanwa") was appointed to such positions
(Sanwa, acting in such capacities, being referred to herein as the "Resigning
Agent" and the "Resigning Security Agent"). Sanwa has indicated that it desires
to withdraw as a Bank under the Existing Credit Agreement and, concurrently, to
resign from its positions as the Current Agent and the Current Security Agent
thereunder and BankBoston and Sumitomo, as the remaining banks under the
Existing Credit Agreement, the Company and the Guarantors have agreed to such
withdrawal and resignation effective as of the Effective Date (as that term and
capitalized terms not otherwise defined herein are defined in Paragraph 14
below).
C. The Company, the Agent, BankBoston, Sumitomo and Sanwa have agreed to
amend the Existing Credit Agreement to reflect the withdrawal and resignation of
Sanwa and the appointment of BankBoston as successor Agent and of Sumitomo as
successor Security Agent and, following such amendment, the Company, the Agent,
the Security Agent, BankBoston and Sumitomo, as Banks, desire to further amend
the Existing Credit Agreement among themselves and, for convenience of
reference, to restate the Existing Credit Agreement in its entirety as set forth
more particularly herein.
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NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Revolving Credit Facility.
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1(a) Revolving Credit Limit. On the terms and subject to the conditions
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set forth herein, the Banks severally agree that they shall from time to time to
but not including the Revolving Loan Maturity Date, make revolving loans (the
"Revolving Loans" or a "Revolving Loan") to the Company, pro rata in accordance
with their respective Percentage Shares, in an aggregate amount not to exceed at
any one time outstanding: (1) the Revolving Loan Credit Limit, less (2) the
aggregate dollar amount of Letters of Credit Outstanding on such date.
1(b) Principal Repayment. Subject to the prepayment requirements of
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Paragraph 4(e) below and the conversion and continuation requirements of
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Paragraph 3 below, the Company shall pay the principal amount of each Revolving
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Loan being maintained as a Eurodollar Loan on the last day of the applicable
Interest Period therefor and shall pay the principal amount of each Revolving
Loan being maintained as an Alternate Base Rate Loan on the Revolving Loan
Maturity Date. Principal amounts prepaid hereunder may be reborrowed on the
terms and subject to the conditions set forth in Paragraph 7(b) below, it being
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expressly acknowledged and agreed that the credit facility provided under this
Paragraph 1 is a revolving credit facility.
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1(c) Calculation of Interest. The Company shall pay interest on Revolving
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Loans outstanding hereunder from the date disbursed to but not including the
date of payment, at a rate per annum equal to, at the option of and as selected
by the Company from time to time (subject to the provisions of Paragraphs 3(b),
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3(c) and 3(d) below): (1) the daily average Alternate Base Rate in effect
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during the applicable computation period, and (2) the Applicable Eurodollar Rate
for the applicable Interest Period, said interest to be payable as provided in
Paragraph 3(a) below.
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1(d) Use of Proceeds. The proceeds of each Revolving Loan shall be used for
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working capital and general corporate purposes.
2. Letter of Credit Facility
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2(a) Issuance of Letters of Credit. On the terms and subject to the
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conditions set forth herein, the L/C Issuing Bank shall from time to time from
and after the Effective Date, issue standby letters of credit (each, and as the
same may be amended, renewed and/or extended from time to time, a "Letter of
Credit" and, collectively, the "Letters of Credit") for the account of the
Company in an aggregate amount available for drawing thereunder not to exceed
the lesser of: (1) the Revolving Loan Credit Limit minus the aggregate dollar
amount of Revolving Loans outstanding, and (2) $5,000,000.00. Each Letter of
Credit shall be issued for
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the purpose of supporting the Company's obligations with respect to letters of
credit issued by Sanwa for the account of the Company under the Existing Credit
Agreement and the Company's obligations to insurance carriers under its general
liability, workers' compensation and other insurance programs. Each Letter of
Credit, and any amendment, renewal or extension thereof, shall be requested by
the Company at least three Business Days prior to the proposed issuance,
amendment, renewal or extension date by delivery to the L/C Issuing Bank of a
duly executed Letter of Credit Application, with a copy to the Agent,
accompanied by all other L/C Documents which the L/C Issuing Bank may require as
a condition to the requested action. No Letter of Credit shall have a stated
expiration date (or provide for the extension of such stated expiration date or
the issuance of any replacement therefor) later than the earlier of: (i) the
365th day following the issuance date thereof, and (ii) the regularly scheduled
Revolving Loan Maturity Date.
2(b) Repayment of L/C Drawings under Letters of Credit. Any L/C Drawing
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under a Letter of Credit shall be payable in full by the Company on the date of
such L/C Drawing.
2(c) Purchase of Participation Interests; Risk Sharing. Upon the issuance
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of each Letter of Credit, the Banks shall be automatically deemed to have
purchased an undivided participation interest therein and in all rights and
obligations relating thereto pro rata in accordance with their respective
Percentage Shares. The Banks hereby absolutely and unconditionally (including,
without limitation, following the occurrence of an Event of Default) agree to
purchase and sell among themselves the dollar amount of any L/C Drawing which is
not paid on the date when due by the Company (with interest thereon until so
paid calculated at the Effective Federal Funds Rate), so that each unrepaid L/C
Drawing shall be held and participated in by the Banks in accordance with their
respective Percentage Shares.
2(d) Absolute Obligation to Repay. The Company's obligation to repay L/C
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Drawings under Letters of Credit shall be absolute, irrevocable and
unconditional under any and all circumstances whatsoever and irrespective of any
set-off, counterclaim or defense to payment which the Company may have or have
had, against any Bank or any other Person, including, without limitation, any
set-off, counterclaim or defense based upon or arising out of:
(1) Any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(2) Any amendment or waiver of or any consent to departure from the
terms of any Letter of Credit;
(3) The existence of any claim, setoff, defense or other right which
the Company or any other Person may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting);
(4) Any allegation that any demand, statement or any other document
presented under any Letter of Credit is forged, fraudulent, invalid or
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insufficient in any respect, or that any statement therein is untrue or
inaccurate in any respect whatsoever or that variations in punctuation,
capitalization, spelling or format were contained in the drafts or any
statements presented in connection with any L/C Drawing;
(5) Any payment by the L/C Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit, or any payment made by the
L/C Issuing Bank under any Letter of Credit to any Person purporting to be
a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any insolvency proceeding;
(6) Any exchange, release or non-perfection of any collateral; or
(7) Any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Company.
Nothing contained herein shall constitute a waiver of any rights of the Company
against the L/C Issuing Bank arising out of the gross negligence or willful
misconduct of the L/C Issuing Bank in connection with any Letter of Credit
issued hereunder.
2(e) Uniform Customs and Practice. The Uniform Customs and Practice for
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Documentary Credits as published by the International Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letter of Credit) apply to the Letters of Credit.
2(f) Relationship to Letter of Credit Applications. In the event of any
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inconsistency between the terms and provisions of this Agreement and the terms
and provisions of the Letter of Credit Applications, the terms and provisions of
this Agreement shall supersede and govern.
3. Interest-Related Provisions.
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3(a) Interest Billing and Payment Requirements. Interest accruing on
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Alternate Base Rate Loans shall be payable quarterly, in arrears, for each
calendar quarter on or before the first Business Day of the next succeeding
calendar quarter in the amount set forth in an interest billing for such
Alternate Base Rate Loans delivered by the Agent to the Company (which delivery
may be telephonic and later confirmed in writing). Interest accruing on
Eurodollar Rate Loans shall be payable, in arrears, on the last day of the
applicable Interest Period therefor.
3(b) Election of Type of Revolving Loan; Conversion Options; Funding of
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Revolving Loans.
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(1) The Company may elect from time to time to have Revolving Loans
funded by giving the Agent irrevocable notice of such election no later
than: (i) in the case of an Alternate Base Rate Loan, 9:30 a.m. (Los
Angeles time) on the requested funding date, and (ii) in the case of a
Eurodollar Rate Loan, 9:30 a.m. (Los Angeles time) on the second Eurodollar
Business Day preceding the proposed funding date. The principal amount of
each Revolving Loan shall be in the minimum amount of: (i) in the case of
Revolving Loans which are Eurodollar Rate Loans, $1,000,000.00, and (ii) in
the case of Revolving Loans which are Alternate Base Rate Loans
$100,000.00. The Company may elect from time to time to convert Revolving
Loans outstanding: (i) as Eurodollar Rate Loans to Alternate Base Rate
Loans by giving the Agent irrevocable notice of such election no later than
9:30 a.m. (Los Angeles time) on the last day of the Interest Period for
such Eurodollar Rate Loan, and (ii) as Alternate Base Rate Loans to
Eurodollar Rate Loans by giving the Agent irrevocable notice of such
election no later than 9:30 a.m. (Los Angeles time) on the second
Eurodollar Business Day preceding the proposed conversion date. Any
conversion of Eurodollar Rate Loans may only be made on the last day of the
applicable Interest Period. No Alternate Base Rate Loan may be converted
into a Eurodollar Rate Loan if an Event of Default or Potential Default has
occurred and is continuing at the requested conversion date. All or any
part of outstanding Revolving Loans may be funded or converted as provided
herein, provided that partial conversions shall be in an amount not less
than the amount required pursuant to the second sentence of this
subparagraph (1) and, in the case of fundings of or conversions into
Eurodollar Rate Loans, after giving effect thereto the then number of
Eurodollar Rate Loans held by each Bank having a different Interest Period
shall not exceed five (5).
(2) The Company may elect from time to time to have any Eurodollar
Rate Loan continued as such upon the expiration of the Interest Period
applicable thereto by giving the Agent irrevocable notice of such election
no later than 9:30 a.m. (Los Angeles time) on the second Eurodollar
Business Day preceding the last day of such Interest Period; provided,
however, that no Eurodollar Rate Loan may be continued as such when any
Event of Default or Potential Default has occurred and is continuing, but
shall be automatically converted to an Alternate Base Rate Loan on the last
day of the Interest Period applicable thereto. The Agent shall notify the
Company promptly that such automatic conversion will occur. If the Company
shall fail to give notice of its election to continue a Eurodollar Rate
Loan as such as provided above, the Company shall be deemed to have elected
to convert the affected Eurodollar Rate Loan to an Alternate Base Rate Loan
on the last day of the applicable Interest Period.
(3) Each request for the funding, continuation or conversion of a
Revolving Loan shall be by telephone (confirmed no later than the next
Business Day in writing, which may be by facsimile) or by telex or
facsimile by the timely delivery by the Company to the Agent of a duly
executed Loan Request.
(4) Upon receipt of a Loan Request for the funding of a new
Revolving Loan or upon the date of any L/C Drawing with respect to a Letter
of Credit
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which is to be converted into a Revolving Loan, the Agent shall notify each
Bank of such Bank's Percentage Share thereof no later than 10:00 a.m. (Los
Angeles time) on the date such Loan Request is received by the Agent or
such L/C Drawing made (said notice by the Agent to the Banks to be given
telephonically and confirmed by facsimile transmission). Each Bank shall
make its Percentage Share of the proposed Revolving Loan available to the
Agent, in same-day funds, on the funding date at the Contact Office of the
Agent, ABA# 000000000, Attention: Commercial Loan Services, Reference:
Chart House (or such other account or reference as the Agent shall
designate) no later than 12:00 noon (Los Angeles time). The failure of any
Bank to advance its Percentage Share of a proposed Revolving Loan shall not
relieve any other Bank of its obligation hereunder to advance its
Percentage Share thereof, but no Bank shall be responsible for the failure
of any other Bank to make any such advance. Nothing contained herein shall
in any manner or to any extent be deemed to constitute a waiver by the
Company of any rights, powers and remedies which it may have against any
Bank for failure of such Bank to fund its Percentage Share of Revolving
Loans as required by the Loan Documents.
3(c) Inability to Determine Rate. In the event that the Agent shall have
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determined (which determination shall be conclusive and binding upon the
Company) that by reason of circumstances affecting the London interbank
eurodollar market adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for any Interest Period, the Agent shall forthwith give
facsimile notice of such determination, confirmed in writing, to each Bank and
to the Company. If such notice is given: (1) any Revolving Loan that was to
have been funded as or converted to a Eurodollar Rate Loan shall be funded or
continued as an Alternate Base Rate Loan, and (2) any outstanding Eurodollar
Rate Loan shall be converted, on the last day of the then current Interest
Period with respect thereto, to an Alternate Base Rate Loan. Until such notice
has been withdrawn by the Agent, the Company shall not have the right to have a
Revolving Loan funded as a Eurodollar Rate Loan or to convert a Revolving Loan
into or to continue a Revolving Loan as a Eurodollar Rate Loan.
3(d) Illegality. Notwithstanding any other provisions herein, if any law,
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regulation, treaty or directive or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans as contemplated by this Agreement: (1) the commitment of
such Bank hereunder to make or to continue Eurodollar Rate Loans or to convert
Alternate Base Rate Loans to Eurodollar Rate Loans shall forthwith be canceled
and (2) such Bank's Percentage Share of Revolving Loans then outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically to Alternate
Base Rate Loans at the end of their respective Interest Periods or within such
earlier period as may be required by law. In the event of a conversion of any
such Revolving Loan prior to the end of its applicable Interest Period the
Company hereby agrees promptly to pay any Bank affected thereby, upon demand,
the amounts required pursuant to Paragraph 3(g) below, it being agreed and
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understood that such conversion shall constitute a prepayment for all purposes
hereof. The provisions hereof shall survive the termination of this Agreement
and payment of the outstanding Revolving Loans and all other amounts payable
hereunder.
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3(e) Requirements of Law; Increased Costs. In the event that any applicable
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law, order, regulation, treaty or directive issued by any central bank or other
governmental authority, agency or instrumentality or in the governmental or
judicial interpretation or application thereof, or compliance by any Bank with
any request or directive (whether or not having the force of law) issued by any
central bank or other governmental authority, agency or instrumentality:
(1) Does or shall subject any Bank to any tax of any kind whatsoever
with respect to this Agreement or any Revolving Loans made or Letter of
Credit issued hereunder, or change the basis of taxation of payments to
such Bank of principal, fee, interest or any other amount payable hereunder
(except for changes in the rate of tax on the overall net income of such
Bank);
(2) Does or shall impose, modify or hold applicable any reserve,
capital requirement, special deposit, compulsory loan or similar
requirements against assets held by, or deposits or other liabilities in or
for the account of, advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such Bank which are not
otherwise included in the determination of interest payable on the
Obligations; or
(3) Does or shall impose on such Bank any other condition relating to
the making of loans, issuance of letters of credit or maintenance of credit
facilities generally;
and the result of any of the foregoing is to increase the cost to such Bank of
making, renewing or maintaining any Revolving Loan or issuing, renewing or
maintaining any Letter of Credit or to reduce any amount receivable in respect
thereof or the rate of return on the capital of such Bank or any corporation
controlling such Bank, then, in any such case, the Company shall promptly pay to
such Bank, upon its written demand made through the Agent, any additional
amounts necessary to compensate such Bank for such additional cost or reduced
amounts receivable or rate of return as determined by such Bank with respect to
this Agreement or Revolving Loans made or Letters of Credit issued hereunder.
If a Bank becomes entitled to claim any additional amounts pursuant to this
Paragraph 3(e), it shall promptly notify the Company of the event by reason of
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which it has become so entitled. A certificate as to any additional amounts
payable pursuant to the foregoing sentence containing the calculation thereof in
reasonable detail and stating the Bank's belief that the method of allocation
chosen is reasonable submitted by a Bank to the Company shall be conclusive in
the absence of manifest error. The provisions hereof shall survive the
termination of this Agreement and payment of the outstanding Revolving Loans and
unrepaid L/C Drawings and all other amounts payable hereunder.
3(f) Funding. Each Bank shall be entitled to fund all or any portion of its
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Revolving Loans in any manner it may determine in its sole discretion,
including, without limitation, in the Grand Cayman inter-bank market, the London
inter-bank market and within the United States.
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3(g) Prepayment Premium. In addition to all other payment obligations
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hereunder, in the event: (1) any Eurodollar Rate Loan is prepaid prior to the
last day of the applicable Interest Period, whether following the occurrence of
an Event of Default or otherwise, or (2) the Company shall fail to borrow or to
continue or to make a conversion to a Eurodollar Rate Loan after the Company has
given notice thereof as provided in Paragraph 3(b) above, then the Company shall
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immediately pay to the Banks holding the Revolving Loans prepaid or not made,
continued or converted, through the Agent, an additional premium sum
compensating each Bank for losses, costs and expenses incurred by such Bank in
connection with such prepayment or such failure to borrow, continue or convert.
The Company acknowledges that such losses, costs and expenses are difficult to
quantify and that, in the case of the prepayment of or failure to borrow,
continue or convert to a Eurodollar Loan, the following formula represents a
fair and reasonable estimate of such losses, costs and expenses:
Amount [Applicable Eurodollar Rate] Days Remaining
Being [Eurodollar Rate for such Incre-] in Interest
Prepaid or [for Increment ment for Days ] x Period
Not Borrowed, x [Being Prepaid - Remaining in ] --------------
Converted, [or Not Borrowed, Interest ] 360
or Continued [Converted Period ]
[or Continued (as quoted on the first
Eurodollar Business
Day following Banks'
receipt of notice thereof)
For purposes of calculating the current Eurodollar Rate for the days remaining
in the Interest Period for both the increment being prepaid or not borrowed,
converted or continued, said current Eurodollar Rate shall be an interest rate
interpolated between Eurodollar Rates quoted for standard calendar periods for
subsequent months' maturities in accordance with normal conventions. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence containing the calculation thereof in reasonable detail submitted by a
Bank to the Company shall be conclusive in the absence of manifest error. The
provisions hereof shall survive the termination of this Agreement and the
payment of all other Obligations.
4. Miscellaneous Provisions.
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4(a) Notes. The obligation of the Company to repay the Revolving Loans
shall be evidenced by a promissory note, issued in amendment and replacement of
the "Notes" issued to and held by the Banks under the Existing Credit Agreement,
payable to the order of each Bank in the form of that attached hereto as
Exhibit A (a "Replacement Note," and, collectively, the "Replacement Notes").
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Upon any advance, conversion, continuation or prepayment of a Revolving Loan as
provided herein, each Bank is hereby authorized to record the date and amount of
each such advance, conversion and continuation made by such Bank, or the date
and amount of each such payment or prepayment of principal of such Revolving
Loan, the applicable Interest Period, if any, and interest rate with respect
thereto, on the schedules annexed to and constituting a part of its respective
Replacement Note (or by any analogous
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method any Bank may elect consistent with its customary practices) and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded absent manifest error. The failure of any Bank to make
any such notation shall not affect in any manner or to any extent the Company's
Obligations hereunder.
4(b) Nature and Place of Payments. All payments made on account of the
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Obligations shall be made by the Company to the Agent for the account of the
Banks or the Agent or the Security Agent, as applicable, without setoff or
counterclaim, in lawful money of the United States of America in immediately
available same day funds, free and clear of and without deduction for any taxes,
fees or other charges of any nature whatsoever imposed by any taxing authority
and must be received by the Agent by 10:00 a.m. (Los Angeles time) on the day of
payment, it being expressly agreed and understood that if a payment is received
after 10:00 a.m. (Los Angeles time) by the Agent, such payment will be
considered to have been made by the Company on the next succeeding Business Day
and interest thereon shall be payable by the Company at the then applicable rate
during such extension. All payments on account of the Obligations shall be made
to the Agent through its Contact Office . If any payment required to be made by
the Company hereunder becomes due and payable on a day other than a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and interest thereon shall be payable at the then applicable rate during such
extension. The Agent is hereby irrevocably authorized by the Company, upon
prior notice to the Company (which notice may be telephonic), to debit the
general operating account of the Company, if any, maintained with the Agent for
the full amount of monthly and periodic interest xxxxxxxx, fees and other
Obligations payable hereunder; provided, however, that the failure of the Agent
to so debit such account shall not in any manner or to any extent affect the
obligation of the Company to pay such Obligations as provided herein and in the
other Loan Documents.
4(c) Default Interest. Notwithstanding anything to the contrary contained
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herein, on any date that there shall have occurred and be continuing an Event of
Default, any and all Obligations outstanding, including, without limitation, any
unrepaid L/C Drawings, shall bear interest at a per annum rate equal to two
percent (2%) in excess of the Alternate Base Rate.
4(d) Computations. All computations of interest and fees payable hereunder
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shall be based upon a year of three hundred and sixty (360) days for the actual
number of days elapsed.
4(e) Prepayments.
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(1) The Company may prepay Revolving Loans in whole or in part at any
time.
(2) The Company shall prepay Revolving Loans outstanding to the
extent required upon a permanent reduction of the Revolving Loan Credit
Limit as provided in Paragraphs 10(f)(3) and 10(i) below.
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(3) The Company shall pay in connection with any prepayment hereunder
all interest accrued but unpaid on Eurodollar Loans to which such
prepayment is applied (it being agreed that interest on prepaid Alternate
Base Rate Loans shall be billed quarterly in normal course) and, in the
event of a prepayment of any Eurodollar Loans prior to the last day of the
Interest Period applicable thereto, amounts required pursuant to Paragraph
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3(g) above, concurrently with payment to the Agent of any principal
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amounts.
4(f) Allocation of Payments Received. Prior to the occurrence of an Event
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of Default and acceleration of the Obligations, all amounts received by the
Agent on account of the Revolving Loans shall be applied against Revolving Loans
in such order as the Company may direct in writing, subject to the requirement
that disbursements to the Banks shall be in accordance with their respective
Percentage Shares. Such amounts shall be disbursed by the Agent to the Banks pro
rata in accordance with their respective Percentage Shares by wire transfer on
the date of receipt if received by the Agent before 10:00 a.m. (Los Angeles
time) or if received later, by 12:00 noon (Los Angeles time) on the next
succeeding Business Day, without further interest payable by the Agent.
Following the occurrence of an Event of Default and acceleration of the
Obligations, all amounts received by the Agent on account of the Obligations
shall be disbursed by the Agent as follows:
(1) First, to the costs and expenses incurred by the Agent and the
Security Agent payable by the Company pursuant to the Loan Documents and to
accrued and unpaid fees of the Agent and the Security Agent payable under
the Loan Documents;
(2) Then, to the Banks, pro rata in accordance with their respective
Percentage Shares, until all outstanding Revolving Loans and unrepaid L/C
Drawings and interest accrued thereon and all other Obligations have been
paid in full, said amounts to be allocated first to interest and then, but
only after all accrued interest has been paid in full, to principal of
Revolving Loans and unrepaid L/C Drawings;
(3) Then, and if but only if there remain Outstanding any Letters of
Credit, to the Agent to hold as cash collateral for the obligation of the
Company to reimburse any future L/C Drawings as the same may occur, until
there are no further Letters of Credit Outstanding; and
(4) Then, to such Persons as may be legally entitled thereto.
4(g) Telephonic/Facsimile Communications. Any agreement of the Agent, the
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Security Agent and/or the Banks under the Loan Documents to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent, the Security Agent and the Banks shall be
entitled to rely on the authority of any Person purporting to be an authorized
Person and the Agent, the Security Agent and the Banks shall have no liability
to the Company or other Person on account of any action taken or not taken by
the Agent, the Security Agent and/or the Banks in reliance upon such telephonic
or facsimile notice. The obligation of the Company to repay the Revolving Loans
shall not be affected in any
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way or to any extent by any failure by the Agent, the Security Agent or the
Banks to receive written confirmation of any telephonic or facsimile notice or
the receipt by the Agent, the Security Agent or the Banks of a confirmation
which is at variance with the terms understood by the Agent, the Security Agent
and/or the Banks to be contained in the telephonic or facsimile notice.
5. Fees. The Company shall pay the following fees:
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5(a) Closing Fee. To the Agent for the pro rata benefit of the Banks in
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accordance with their respective Percentage Shares, a one time, non-refundable
closing fee in the amount of $110,000.00, said closing fee to be payable on or
before the Effective Date.
5(b) Facility Fee. To the Agent for the pro rata benefit of the Banks in
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accordance with their respective Percentage Shares, an annual facility fee, said
fee to be payable quarterly, in arrears, for each calendar quarter (or portion
thereof) on or before the first Business Day of the next succeeding calendar
quarter, commencing for the calendar quarter ending June 30, 1997, and on the
Revolving Loan Maturity Date, calculated at the per annum rate of one quarter of
one percent (0.25%) against the daily average Revolving Loan Credit Limit in
effect during such calendar quarter (or portion thereof).
5(c) Letter of Credit Fees.
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(1) To the Agent for the pro rata benefit of the Banks in accordance
with their respective Percentage Shares, in consideration of the issuance by
the L/C Issuing Bank of each Letter of Credit (and in connection with any
annual renewal or extension thereof), quarterly, in arrears, on the first
Business Day of each calendar quarter for the immediately preceding calendar
quarter (or portion thereof), a fee calculated against the daily average
amount available for drawing under such Letter of Credit during such calendar
quarter (or portion thereof) at a per annum rate equal to the daily average
Applicable Eurodollar Spread in effect during such calendar quarter (or
portion thereof).
(2) Directly to the L/C Issuing Bank for its own account:
(i) Quarterly, in arrears, on the first Business Day of each
calendar quarter for the immediately preceding calendar quarter (or
portion thereof), a fronting fee calculated against the daily average
amount available for drawing under each Letter of Credit during such
calendar quarter (or portion thereof) at the per annum rate of one
quarter of one percent (0.25%); and
(ii) From time to time upon demand of the L/C Issuing Bank, such
fees and charges, including, without limitation, miscellaneous charges
and transfer fees, relating to the Letters of Credit as the L/C Issuing
Bank customarily charges with respect to similar letters of credit
issued by it.
11
5(d) Agent's Administrative Fee. To the Agent for its own account, an
--------------------------
annual non-refundable fee, payable in advance on or before the Effective Date
and on each anniversary of such date thereafter, of $15,000.00.
5(e) Security Agent's Fee. To the Security Agent for its own account, an
--------------------
annual non-refundable fee, payable in advance on or before the Effective Date
and on each anniversary of such date thereafter, of $10,000.00.
6. Amendment and Reaffirmation of Collateral Security and Guaranties;
------------------------------------------------------------------
Additional Documents.
--------------------
6(a) Amendment and Reaffirmation of Company Security Documents. Effective
---------------------------------------------------------
as of the Effective Date: (1) the Company Security Agreement is hereby amended
to replace Schedules I and II and Exhibit A thereto with the Schedules and
Exhibit attached to the copy of the Company Security Agreement attached hereto
as Exhibit M, (2) the Company Pledge Agreement is hereby amended to replace
---------
Exhibit A thereto with the new Exhibit A attached to the copy of the Company
Pledge Agreement attached hereto as Exhibit L, and (3) the Trademark Notice is
---------
hereby amended to replace Exhibit A thereto with the new Exhibit A attached to
the copy of the Trademark Notice attached hereto as Exhibit U. Following the
---------
Effective Date the Bank/Metropolitan Obligations shall continue to be secured by
the Company Security Agreement, the Company Pledge Agreement, the Trademark
Notice and the Mortgages (collectively, as the same may be amended, supplemented
or replaced from time to time, the "Company Security Documents"). The Company
hereby affirms and agrees that: (i) the execution and delivery by the Company of
and the performance of its obligations under this Agreement shall not in any way
amend, impair, invalidate or otherwise affect any of the obligations of the
Company or the rights of the Secured Parties under the Company Security
Documents or any other document or instrument made or given by the Company in
connection therewith, (ii) the term "Obligations" as used in the Company
Security Documents includes, without limitation, the Obligations of the Company
under the Existing Credit Agreement as amended and restated hereunder and all
future Obligations arising hereunder following the Effective Date, and (iii)
each of the Company Security Documents remains in full force and effect and
continues to constitute a first priority security interest in and lien upon the
Collateral covered thereby.
6(b) Amendment and Reaffirmation of Guaranties and Related Collateral
----------------------------------------------------------------
Documents. The Bank/Metropolitan Obligations shall continue to be guaranteed,
---------
severally, by each of the Parent and Big Wave pursuant to a guaranty in the form
of that attached hereto as Exhibit B (an "Amended and Restated Guaranty"),
---------
executed and delivered by each of the Parent and Big Wave on or before the
Effective Date and constituting an amendment and restatement of all guaranty
obligations of the Parent and Big Wave, respectively, set forth in the Existing
Credit Agreement. Effective as of the Effective Date: (1) the Big Wave Security
Agreement is hereby amended to replace Exhibit A and Schedule 4(A) thereto with
the Exhibit A and Schedule 4(A) attached to the copy of the Big Wave Security
Agreement attached hereto as Exhibit K, and (2) the Parent Pledge Agreement is
---------
hereby amended to replace Exhibit A thereto with the new Exhibit A attached to
the copy of the Parent Pledge Agreement attached hereto as
12
Exhibit T. Following the Effective Date all obligations of the Parent under the
---------
Amended and Restated Guaranty executed by it shall continue to be secured by a
first perfected security interest in and lien on the collateral which is the
subject of the Parent Pledge Agreement and all obligations of Big Wave under the
Amended and Restated Guaranty executed by it shall continue to be secured by a
first perfected security interest in and lien on the collateral which is the
subject of the Big Wave Security Agreement. Each of the Parent and Big Wave
hereby affirms and agrees that: (1) the execution and delivery by the Company,
the Parent and Big Wave of and the performance of their respective obligations
under this Agreement shall not in any way amend, impair, invalidate or otherwise
affect any of the obligations of the Company, the Parent or Big Wave or the
rights of the Secured Parties under the Parent Pledge Agreement or the Big Wave
Security Agreement or any other document or instrument made or given by the
Company, the Parent or Big Wave in connection therewith, (2) the term
"Obligations" as used in the Parent Pledge Agreement and the Big Wave Security
Agreement includes, without limitation, the Obligations of the Company under the
Existing Credit Agreement as amended and restated hereunder and all future
Obligations arising hereunder following the Effective Date, and (3) each of the
Parent Pledge Agreement and the Big Wave Security Agreement remains in full
force and effect and continues to constitute a first priority security interest
in and lien upon the collateral covered thereby.
6(c) Additional Mortgages. On or before the Effective Date in the case of
--------------------
the Company's restaurant property located in Dobbs Ferry, New York (the "Xxxxx
Ferry Property") and no later than sixty (60) days following the Effective Date
in the case of the Company's restaurant properties located in Vero Beach,
Florida and Naples, Florida (the "Additional Florida Properties"), the Company
shall execute and deliver to the Security Agent each of the following
(collectively, the "Additional Mortgage Documents"):
(1) A Mortgage, duly executed in recordable form, covering each of
the Xxxxx Ferry Property and the Additional Florida Properties;
(2) Such information regarding each of the Xxxxx Ferry Property and
the Additional Florida Properties as the Security Agent may reasonably
request, including, without limitation, environmental consultants' reports
concerning hazardous substances and environmental compliance, soils and
geological reports, the certificate of occupancy, applicable
building/zoning ordinances and zoning maps and engineering reports; and
(3) Such additional documents, instruments and agreements, including,
without limitation, notices to and consents and acknowledgments of third
parties, a legal description, financing statements and a title policy with
appropriate endorsements (or binding commitment to issue the same) as the
Security Agent may reasonably request to obtain for the Banks and
Metropolitan a first priority perfected lien on the Xxxxx Ferry Property
and the Additional Florida Properties and various rights relating thereto
as collateral security for the Bank/Metropolitan Obligations.
13
6(d) Additional Documents. The Company and each of the Guarantors hereby
--------------------
agrees to execute and deliver and to cause to be executed and delivered to the
Agent and the Security Agent from time to time such documents, instruments and
agreements as are in the Agent's judgment necessary or desirable to obtain and
maintain for the Agent and the Security Agent, as applicable, on behalf of the
Banks the benefit of the Loan Documents.
7. Conditions to Credit Events.
---------------------------
7(a) First Credit Event. As conditions precedent to the first Credit Event
------------------
hereunder:
(1) The Company shall have delivered or shall have had delivered to
the Agent or the Security Agent, as applicable, in form and substance
satisfactory to the Agent and its counsel, each of the following (with
sufficient copies for each of the Banks):
(i) A duly executed copy of this Agreement;
(ii) A duly executed copy of each of the Replacement Notes;
(iii) From each of the Guarantors, a duly executed Amended and
Restated Guaranty;
(iv) The Additional Mortgage Documents for the Xxxxx Ferry
Property;
(v) An amendment to the Existing Credit Agreement in the form of
that attached hereto as Exhibit C, duly executed by each of the
---------
Company, the Guarantors, the Banks, the Agent, the Security Agent,
Sanwa (in its capacities as a "Bank" under the Existing Credit
Agreement, the Resigning Agent and the Resigning Credit Agent) and
Metropolitan and evidence that the transactions contemplated thereby
will be consummated and the "Effective Date" thereunder will occur
concurrently with the occurrence of the Effective Date hereunder;
(vi) Certified copies of resolutions of the Board of Directors of
the Company approving the execution and delivery of the Loan Documents
to which the Company is party;
(vii) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers
of the Company authorized to sign the Loan Documents to which the
Company is party;
14
(viii) Certified copies of resolutions of the Boards of Directors
of each of the Guarantors approving the execution and delivery of the
Amended and Restated Guaranty to be executed by such Guarantor;
(ix) A certificate of the Secretary or an Assistant Secretary
of each of the Guarantors certifying the names and true signatures of
the officer(s) of the Guarantor authorized to sign the Guaranty to be
executed by such Guarantor;
(x) A copy of each of the Certificate of Incorporation and
Bylaws of the Company and each of the Guarantors, certified by the
Secretary or an Assistant Secretary of such Person as of the Effective
Date as being accurate and complete;
(xi) A certificate of good standing or status of the Company
from the Secretary of State of the State of California and from the
State of Delaware as of a recent date;
(xii) A certificate of the chief financial officer or treasurer
of the Company in the form of that attached hereto as Exhibit D dated
---------
as of the date of the proposed Credit Event, confirming the accuracy
and completeness of the representations and warranties of the Company
set forth in the Loan Documents and the fact that there does not exist
a Potential Default or an Event of Default;
(xiii) The "Compliance Certificate" referred to in (S)11.9(c) of
the Existing Credit Agreement, dated at and as of March 31, 1997,
demonstrating in detail satisfactory to the Agent and the Banks
compliance with the financial covenants set forth in the Existing
Credit Agreement at and as of such date;
(xiv) An opinion of counsel to the Company and the Guarantors,
which counsel shall be satisfactory to the Agent, substantially in the
form of that attached hereto as Exhibit E;
---------
(xv) The written consent, in form and substance satisfactory to
the Agent, of Metropolitan to the execution and delivery by the
Company and the Guarantors of this Agreement and the other Loan
Documents and the performance of each such Person's obligations
hereunder and thereunder;
(xvi) Such amendments of and supplements to the Mortgages, in
recordable form, together with such endorsements to policies of title
insurance relating thereto (or binding commitments to issue the same),
and such UCC financing statement assignments as the Agent or the
Security Agent may require to reflect the transactions contemplated
hereby and to reflect the resignation of Sanwa and the appointment of
Sumitomo as Security Agent;
15
(xvii) Evidence satisfactory to the Agent and the Security Agent
that the security interests and the liens on the Collateral created in
favor of the Secured Parties by the Security Documents under the
Existing Credit Agreement will, following the Effective Date, continue
to constitute valid and binding first priority perfected security
interests in and liens upon the obligations purported to be secured
thereby, including, without limitation, in the case of the Company
Security Documents, the Obligations of the Company hereunder;
(xviii) Evidence satisfactory to the Agent and the Security Agent
that the Security Agent has been named as an additional insured and
loss payee, as applicable, on all certificates of insurance covering
properties of the Company required to be maintained hereunder;
(xix) Evidence satisfactory to the Agent and the Banks that the
financial statements dated as of the Statement Date referred to in
Paragraph 8(a) below fairly present the business and financial
--------------
condition of the Parent and its Subsidiaries as of the close of
business on the date thereof and that there has been no material
adverse change in the assets, business or financial condition of the
Parent and its Subsidiaries since the Statement Date; and
(xx) All fees payable on or before the Effective Date as
provided in Paragraph 5 above.
-----------
(2) All acts and conditions (including, without limitation, the
obtaining of any necessary regulatory approvals and the making of any
required filings, recordings or registrations) required to be done and
performed and to have happened precedent to the execution, delivery and
performance of the Loan Documents and to constitute the same legal, valid
and binding obligations, enforceable in accordance with their respective
terms, shall have been done and performed and shall have happened in due
and strict compliance with all applicable laws.
(3) All documentation, including, without limitation, documentation
for corporate and legal proceedings in connection with the transactions
contemplated by the Loan Documents shall be satisfactory in form and
substance to the Agent and its counsel.
7(b) All Credit Events. As conditions precedent to each Bank's obligation
-----------------
to advance its Percentage Share of any Revolving Loan, including the first
Revolving Loan and including the conversion of any Revolving Loan to another
type of Revolving Loan and the continuation of any Eurodollar Rate Loan after
the end of its applicable Interest Period, or of the L/C Issuing Bank to issue,
amend, renew or extend any Letter of Credit, at and as of the date of such
action:
(1) There shall have been delivered to the Agent a Loan Request or, as
applicable, a Letter of Credit Application and any required L/C Documents,
therefor;
16
(2) The representations and warranties of the Company and the
Guarantors contained in the Loan Documents shall be accurate and complete
in all material respects as if made on and as of the date of such advance,
conversion, continuance or issuance or, with respect to any representation
made as of a specific date, shall have been accurate and complete as of
such date;
(3) There shall not have occurred an Event of Default or Potential
Default; and
(4) If the Credit Event is the making of a Revolving Loan, following
the funding thereof the aggregate principal amount of Revolving Loans
outstanding shall not exceed the limitations of Paragraph 1(a) and if the
--------------
Credit Event is the issuance of a Letter of Credit, following the issuance
thereof the aggregate available amount of Outstanding Letters of Credit
shall not exceed the limitations of Paragraph 2(a) above.
--------------
By delivering a Loan Request to the Agent hereunder, the Company shall be deemed
to have represented and warranted the accuracy and completeness of the
statements set forth in subparagraphs (b)(2) through (b)(4) above, as
applicable.
8. Representations and Warranties of the Company and the Guarantors. As an
----------------------------------------------------------------
inducement to the Agent, the Security Agent and each Bank to enter into this
Agreement and to make Revolving Loans as provided herein, the Company and each
of the Guarantors represents and warrants to the Agent, the Security Agent and
each Bank that:
8(a) Financial Condition. The financial statements, dated the Statement
-------------------
Date and the Interim Date, copies of which have heretofore been furnished to
each Bank by the Agent, are complete and correct and present fairly in
accordance with GAAP the financial condition of the Parent and its consolidated
Subsidiaries at such dates and the consolidated and consolidating results of
their operations and changes in financial position for the fiscal periods then
ended except that the statements dated as of the Interim Date do not contain
footnotes and are subject to changes resulting from audit and ordinary year-end
adjustments.
8(b) No Change. Since the Statement Date there has been no material adverse
---------
change in the business, operations, assets or financial or other condition of
the Company or any Guarantor. Except as expressly disclosed in writing to the
Agent and the Banks prior to the Effective Date, from the Statement Date through
the Effective Date neither the Company nor any Guarantor has entered into,
incurred or assumed any material long-term debt, mortgages, leases or binding
commitments, nor commenced any significant project, nor made any purchase or
acquisition of any significant property.
8(c) Corporate Existence; Compliance with Law. The Company and each of the
----------------------------------------
Guarantors: (1) is duly organized, validly existing and in good standing as a
corporation under the laws of the jurisdiction of its organization and is
qualified to do business in each jurisdiction where its ownership of property or
conduct of business requires such qualification and where failure to qualify
would have a material adverse effect on the Company
17
or any Guarantor or its property and/or business or on the ability of the
Company or any Guarantor to pay or perform the Obligations, (2) has the
corporate power and authority and the legal right to own and operate its
property and to conduct business in the manner in which it does and proposes so
to do, and (3) is in compliance with all Requirements of Law and Contractual
Obligations, the failure to comply with which could have a material adverse
effect on the business, operations, assets or financial or other condition of
the Company or any Guarantor.
8(d) Corporate Power; Authorization; Enforceable Obligations. The Company
-------------------------------------------------------
and each of the Guarantors has the corporate power and authority and the legal
right to execute, deliver and perform the Loan Documents to which it is a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance of such Loan Documents. The Loan Documents to which the
Company or any of the Guarantors are party have been duly executed and delivered
on behalf of such Person and constitute legal, valid and binding obligations of
such Person enforceable against such Person in accordance with their respective
terms, subject to the effect of applicable bankruptcy and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity.
8(e) No Legal Bar. The execution, delivery and performance of the Loan
------------
Documents to which the Company or any of the Guarantors is party, the borrowing
hereunder and the use of the proceeds thereof, will not violate any Requirement
of Law or any Contractual Obligation of the Company or any of the Guarantors the
violation of which could have a material adverse effect on the business,
operations, assets or financial or other condition of the Company or any
Guarantor or create or result in the creation of any Lien on any assets of the
Company or any Guarantor (other than the Liens in favor of the Secured Parties
created by the Security Documents.
8(f) No Material Litigation. Except as disclosed on Exhibit F hereto, no
---------------------- ---------
litigation, investigation or proceeding of or before any arbitrator, court or
Governmental Authority is pending or, to the knowledge of the Company,
threatened by or against the Company or any Guarantor or against any of such
Persons' properties or revenues which is likely to be adversely determined and
which, if adversely determined, is likely to have a material adverse effect on
the business, operations, property or financial or other condition of the
Company or any Guarantor.
8(g) Taxes. Except as disclosed on Exhibit G hereto, the Company and each
----- ---------
of the Guarantors have filed or caused to be filed all tax returns that are
required to be filed and have paid all taxes shown to be due and payable on said
returns or on any assessments made against them or any of their property other
than taxes which are being contested in good faith by appropriate proceedings
and as to which the Company or such Guarantor has established adequate reserves
in conformity with GAAP.
8(h) Investment Company Act. Neither the Company nor any Guarantor is an
----------------------
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
18
8(i) Subsidiaries. Attached hereto as Exhibit H is an accurate and complete
------------ ---------
list of all Subsidiaries of the Parent, their respective jurisdictions of
incorporation and the percentage of their capital stock owned by the Parent, the
Company or other Subsidiaries. All of the issued and outstanding shares of
capital stock of such Subsidiaries have been duly authorized and issued and are
fully paid and non-assessable.
8(j) Federal Reserve Board Regulations. Neither the Company nor any
---------------------------------
Guarantor is engaged or will engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of such terms
under Regulations U and X of the Board of Governors of the Federal Reserve
System (12 C.F.R. Parts 221 and 224). No part of the proceeds of any Revolving
Loan issued hereunder will be used for "purchasing" or "carrying" "margin stock"
as so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of the Regulations of the Board of Governors of the Federal
Reserve System.
8(k) ERISA. Except as disclosed on Exhibit F hereto, the Company and each
----- ---------
Guarantor is in compliance in all respects with the requirements of ERISA and no
Reportable Event has occurred under any Plan maintained by the Company or any of
its Subsidiaries which is likely to result in the termination of such Plan for
purposes of Title IV of ERISA.
8(l) Assets. The Company and each Guarantor has good and marketable title
------
to all property and assets reflected in the financial statements dated the
Interim Date referred to in Paragraph 8(a) above, except property and assets
--------------
sold or otherwise disposed of in compliance with Paragraph 10(f) below and
---------------
otherwise in the ordinary course of business subsequent to the Interim Date.
Neither the Company nor any Guarantor has outstanding Liens on any of its
properties or assets nor are there any security agreements to which the Company
or any of its Subsidiaries is a party, or title retention agreements, whether in
the form of leases or otherwise, of any personal property except as reflected in
the financial statements referred to in Paragraph 8(a) above or as permitted
--------------
under Paragraph 10(a) below.
---------------
8(m) Securities Acts. Neither the Company nor any Guarantor has issued any
---------------
unregistered securities in violation of the registration requirements of Section
5 of the Securities Act of 1933, as amended, or any other securities law, and is
not violating any rule, regulation or requirement under the Securities Act of
1933, as amended, or the Securities and Exchange Act of 1934, as amended. The
Company is not required to qualify an indenture under the Trust Indenture Act of
1939, as amended, in connection with its execution and delivery of the Loan
Documents.
8(n) Consents, Etc. No consent, approval, authorization of, or
-------------
registration, declaration or filing with any Governmental Authority or any other
Person is required on the part of the Company or any Guarantor in connection
with the execution and delivery of the Loan Documents or the performance of or
compliance with the terms, provisions and conditions hereof or thereof other
than such as have been obtained prior to or concurrently with the occurrence of
the Effective Date.
19
8(o) Copyrights, Patents, Trademarks and Licenses, etc. The Company owns or
-------------------------------------------------
is licensed or otherwise has the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, authorizations
and other rights that are reasonably necessary for the operation of its
business, without conflict with the rights of any other Person. To the best
knowledge of the Company, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Company infringes upon any rights held by
any other Person. Except as specifically disclosed in Exhibit F hereto, no claim
---------
or litigation regarding any of the foregoing is pending or, to the knowledge of
the Company, threatened, and, to the knowledge of the Company, no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or proposed, which, in either case, could,
reasonably be expected to have a material adverse effect on the Company or any
Guarantor.
8(p) Hazardous Materials. Except as disclosed on Exhibit I hereto, neither
------------------- ---------
the Company nor any Guarantor nor, to the best knowledge of the Company and the
Guarantors, any other Person has: (1) caused or permitted any Hazardous
Materials to be released or disposed of in, on, under or about any Property or
any part thereof; (2) caused or permitted to be incorporated into or utilized in
the construction of any improvements located on any Property any chemical,
material, or substance to which exposure is prohibited, limited or regulated by
any Hazardous Materials Laws or which, even if not so regulated, is known to
pose a hazard (either in its present form or if disturbed or removed) to the
health and safety of the occupants of or visitors to such Property or of
property adjacent to such Property; or (3) discovered the presence on or under
any Property of any underground tanks used for the storage of Hazardous
Materials or any occurrence or condition on any Property or any property
adjacent to or in the vicinity of such Property that could cause such Property
or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such Property under any Hazardous Materials
Laws.
8(q) Regulated Entities. Neither the Company nor any Guarantor is subject
------------------
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
8(r) Solvency. The Company and each of the Guarantors (both before and
--------
after giving effect to the transactions contemplated hereby) is solvent, has
assets having a fair value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured, and has,
and will so long as this Agreement is in effect have, access to adequate capital
for the conduct of its business and the ability to pay its debts from time to
time incurred in connection therewith as such debts mature.
8(s) Equity Investment. Chart House Investors LLC has made an unconditional
-----------------
equity investment in the Parent of $19,550,000.00.
9. Affirmative Covenants. The Company and each of the Guarantors (to the
---------------------
extent such covenant relates to such Guarantor or a Subsidiary of such
Guarantor) hereby
20
covenants and agrees with the Agent and each Bank that, as long as any
Obligations remain unpaid or any Bank has any obligation to make Revolving Loans
or the L/C Issuing Bank has any obligation to issue Letters of Credit hereunder,
the Company and the Guarantors shall:
9(a) Financial Statements. Furnish or cause to be furnished to the Agent
--------------------
and to each of the Banks directly:
(1) Within ninety (90) days after the last day of each fiscal year of
the Parent, Form 10-K as filed with the Securities and Exchange Commission
(the "SEC") and accompanied by a report and unqualified opinion of Xxxxxx
Xxxxxxxx LLP or other independent public accountant or firm of independent
public accountants reasonably acceptable to the Agent (unless such
unqualified opinion is contained within Form 10-K);
(2) Within forty five (45) days after the last day of each fiscal
quarter of the Parent (other than the final quarter), Form 10-Q as filed
with the SEC;
(3) Concurrently with the delivery of each of the financial statements
delivered pursuant to subparagraph (1) and (2) above: (i) a certificate of
the chief financial officer of each of the Parent and the Company: (x)
stating that such financial statements are presented fairly in accordance
with GAAP, (y) confirming as of the last day of such fiscal period the
continuing accuracy and completeness of all representations and warranties
of the Company and the Parent, as applicable, set forth in the Loan
Documents or, with respect to any representation and warranty made as of a
specific date, the accuracy and completeness as of such date, and (z)
confirming that there does not exist a Potential Default or an Event of
Default hereunder, and (ii) a Compliance Certificate demonstrating in
detail satisfactory to the Agent and the Banks compliance with the
financial covenants set forth in Paragraphs 10(k), 10(l) and 10(m) below;
----------------------- -----
(4) Promptly upon receipt thereof, copies of all management letters
and other material reports which are submitted to the Company or any
Guarantor by its independent public accountants in connection with any
annual or interim audit of the books of the Company or any Guarantor made
by such accountants;
(5) As soon as practicable but in any event within ten (10) Business
Days after the issuance thereof, copies of such other financial statements
and reports as the Parent shall send to its stockholders, and copies of all
regular and periodic reports which the Parent may be required to file with
the SEC or any similar or corresponding governmental commission, department
or agency substituted therefor, or any similar or corresponding
governmental commission, department, board, bureau or agency, federal or
state; and
(6) Within ten (10) Business Days following the presentation thereof
to the Board of Directors of the Parent but in no event later than sixty
(60) days following the end of each fiscal year, a detailed operating
budget for the Parent, including
21
income statements, balance sheets and statements of cash flow broken down
by fiscal quarter, for the then current fiscal year.
9(b) Other Information. Promptly furnish or cause to be furnished to the
-----------------
Agent (with the Agent providing the same to each of the Banks) such additional
financial and other information, including, without limitation, financial
statements of the Company and the Guarantors as the Agent or any Bank (through
the Agent) may from time to time reasonably request, including, without
limitation, such information as is necessary to enable any Bank to participate
out any of its interests in the Revolving Loans and other Obligations hereunder
or to enable other Acceptable Financial Institutions to become signatories
hereto.
9(c) Payment of Indebtedness. And shall cause each of its Subsidiaries to,
-----------------------
pay, discharge or otherwise satisfy at or before maturity or before it becomes
delinquent, defaulted or accelerated, as the case may be, all its Indebtedness
(including taxes), except Indebtedness being contested in good faith and for
which provision is made to the satisfaction of the Agent for the payment thereof
in the event such Person is found to be obligated to pay such Indebtedness and
which Indebtedness is thereupon promptly paid by such Person.
9(d) Maintenance of Existence and Properties. And shall cause each of its
---------------------------------------
Subsidiaries to, maintain its corporate existence and maintain all rights,
privileges, licenses, approvals, franchises, properties and assets necessary or
desirable in the normal conduct of its business, and comply with all Contractual
Obligations and Requirements of Law the failure to comply with which could have
a material adverse effect on the business, operations, assets or financial or
other condition of the Company or any Guarantor.
9(e) Inspection of Property; Books and Records; Discussions. And shall
------------------------------------------------------
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law the failure to comply with which could have a material
adverse effect on the business, operations, assets or financial or other
condition of the Company or any Guarantor shall be made of all dealings and
transactions in relation to its business and activities, and permit
representatives of the Agent or any Bank (which shall be, but only so long as
there has not occurred and is continuing an Event of Default, at no cost or
expense to the Company or any Guarantor, upon reasonable notice and during
normal business hours) to visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any reasonable time and
as often as may reasonably be desired by the Agent or any Bank and to discuss
the business, operations, properties and financial and other condition of the
Company and any Guarantor with officers and employees of such Persons and with
their independent public accountants.
9(f) Notices. Promptly give written notice to the Agent and each of the
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Banks directly of:
(1) The occurrence of any Potential Default or Event of Default;
22
(2) Any litigation or proceeding affecting the Company or any
Guarantor involving amounts in excess of $1,000,000.00 and any other
litigation or proceeding which is likely to be resolved adversely and which
if resolved adversely could have a material adverse effect on the business,
operations, property, or financial or other condition of the Company or any
Guarantor; and
(3) Any material adverse change in the business, operations, property
or financial or other condition of the Company or any Guarantor.
9(g) Expenses. Pay all reasonable out-of-pocket expenses (including fees
--------
and disbursements of counsel): (1) of the Agent and the Security Agent incident
to the preparation, negotiation and administration of the Loan Documents and the
protection of the rights of the Secured Parties, the Agent and the Security
Agent under the Loan Documents, and (2) of the Agent and the Security Agent,
whether or not there shall have occurred an Event of Default, and, following the
occurrence of an Event of Default, each of the Banks, incident to the valuation
of the Collateral and the enforcement of payment of the Bank/Metropolitan
Obligations, whether by judicial proceedings or otherwise, including, without
limitation, in connection with bankruptcy, insolvency, liquidation,
reorganization, moratorium or other similar proceedings involving the Company or
a "workout" of the Bank/Metropolitan Obligations and including, without
limitation, fees and expenses of auditors and environmental and other
consultants. The obligations of the Company under this Paragraph 9(g) shall be
--------------
effective and enforceable whether or not any Revolving Loan is funded or Letter
of Credit issued hereunder and shall survive payment of all other Obligations.
9(h) Loan Documents. Comply with and observe all terms and conditions of
--------------
this Agreement, the Replacement Notes, the Security Documents, the Amended and
Restated Guaranties and the Letter of Credit Applications.
9(i) Insurance. And shall cause each of its Subsidiaries to, obtain and
---------
maintain insurance with responsible companies in such amounts and against such
risks as are usually carried by corporations engaged in similar businesses
similarly situated, and furnish any of the Banks on request (made through the
Agent) full information as to all such insurance. Without limiting the
generality of the foregoing, the Company and the Guarantors will and will cause
each of their Subsidiaries to: (a) keep all of its physical property insured
against fire and extended coverage risks in amounts and with deductibles equal
to those generally maintained by businesses engaged in similar activities in
similar geographic areas, (b) maintain all such workers' compensation or similar
insurance as may be required by law, and (c) maintain, in amounts and with
deductibles equal to those generally maintained by businesses engaged in similar
activities in similar geographic areas general public liability insurance
against claims for bodily injury, death or property damage occurring on, in or
about the properties of the Company, any Guarantor or their Subsidiaries,
business interruption insurance and product liability insurance.
9(j) Hazardous Materials. And shall cause each of its Subsidiaries to:
-------------------
23
(1) Immediately advise the Agent in writing if (i) any Hazardous
Materials Claims are hereafter asserted; (ii) any quantity of Hazardous
Materials has been released, discharged, or disposed of on, under, or from
any Property, such release is reportable under applicable Hazardous
Materials Laws to any governmental agency or third party, and such incident
has not been previously disclosed to Agent; (iii) any discharge, release,
or disposal of any Hazardous Materials in, on, or under any Property would,
if remediation of such condition were required by any applicable
governmental agency with jurisdiction over such Property, result in
remediation costs in excess of $500,000.00; and (iv) upon removal of any
underground or aboveground tanks used to store any Hazardous Materials, the
characterization of any releases, discharges, or disposal of any Hazardous
Materials is required under applicable Hazardous Materials Laws, and such
characterization, and any material updates required by any governmental
agency with jurisdiction over such incident, shall also be provided to
Agent.
(2) Keep and maintain each Property in compliance with, and not cause
or permit any Property to be in violation of, any Hazardous Material Laws,
and in all events shall ensure that in the event any discharge, release or
disposal of any Hazardous Materials has occurred in, on, under, or about
any Property that such incident: (i) does not have any material adverse
impact upon the ability of the operator of such Property to continue to
operate the Property in substantially the same manner as occurred prior to
the incident; and (ii) such operator complies with all orders, notices and
other directives of any and all governmental agencies or authorities with
jurisdiction over the incident, including, without limitation,
implementation of such remediation or abatement measures as may be required
by such agencies or may be reasonably necessary to bring such Property into
compliance with applicable Hazardous Materials Laws.
9(k) Compliance with Laws. And shall cause each of its Subsidiaries to
--------------------
comply, in all material respects, with all Requirements of Law and Contractual
Obligations the failure to comply with which could have a material adverse
effect on the business, operations, assets or financial or other condition of
the Company or any Guarantor.
9(l) Reserves. And shall cause each of its Subsidiaries to, maintain
--------
appropriate reserves for depreciation, taxes and other contingent expenses or
liabilities in accordance with GAAP.
10. Negative Covenants. The Company and each Guarantor (to the extent such
------------------
covenant relates to such Guarantor or to any Subsidiary of such Guarantor)
hereby covenants and agrees that, as long as any Obligations remain unpaid or
any Bank has any obligation to make Revolving Loans or the L/C Issuing Bank has
any obligation to issue Letters of Credit hereunder, neither the Company nor any
Guarantor shall, directly or indirectly:
10(a) Liens. And shall not permit any of their respective Subsidiaries to,
-----
create, incur, assume or suffer to exist any Lien upon any of its property and
assets except:
24
(1) Liens arising from attachments or similar proceedings, pending
litigation, judgments or taxes or assessments in any such event whose
validity or amount is being contested in good faith by appropriate
proceedings satisfactory to the Banks and for which adequate reserves have
been established and are maintained in accordance with generally accepted
accounting principles, or taxes and assessments which are not due and
delinquent;
(2) Liens of carriers, warehousemen, mechanics and materialmen
and other like Liens;
(3) Pledges or deposits made in connection with workmen's
compensation, unemployment or other insurance, old age pensions, or other
Social Security benefits, and good faith deposits in connection with
tenders, contracts (not including borrowed money) or leases to which it is
a party or deposits to secure, or in lieu of, surety, penalty or appeal
bonds, performance bonds and other similar obligations;
(4) Purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof to
secure purchase money indebtedness of the type and amount permitted by
Paragraph 10(b)(4) incurred in connection with the development of new
------------------
restaurants, which security interests or mortgages cover only the real or
personal property so acquired;
(5) Such minor defects, irregularities, encumbrances, easements,
rights of way, and clouds on title as normally exist with respect to
similar properties which do not materially impair the property affected
thereby for the purpose for which it was acquired;
(6) Landlords' Liens under leases;
(7) Liens in favor of the Security Agent arising under the
Security Documents; and
(8) Liens securing Other Permitted Secured Debt.
10(b) Indebtedness. And shall not permit any of their respective
------------
Subsidiaries to, create, incur, assume or suffer to exist, or otherwise become
or be liable in respect of any Indebtedness except:
(1) Indebtedness of the Company and the Guarantors arising under this
Agreement and the other Loan Documents;
(2) Indebtedness of the Company and the Guarantors arising under
the 10.40% Notes and the 10.40% Note Purchase Agreement and the 6.69% Notes
and the 6.69% Note Purchase Agreement;
25
(3) Indebtedness of any Subsidiary of the Parent incurred in the
ordinary course of business and not incurred through the borrowing of money
or the obtaining of credit or the leasing of property, except that credit
on an open account basis customarily extended to such Subsidiary in
connection with purchases of goods or services in the ordinary course of
business shall be permitted;
(4) Indebtedness of any Subsidiary of the Parent incurred in
connection with the acquisition after the date hereof of any real or
personal property by such Subsidiary, provided that the principal amount of
such Indebtedness shall not exceed in any case the cost, to such Subsidiary
of the real or personal property so acquired, and provided further, that
the aggregate of all of such Indebtedness for all Subsidiaries may not at
any time exceed $5,000,000.00 less the amount of Indebtedness incurred as
permitted by subparagraph (7) hereof;
(5) Indebtedness of the Parent or any Subsidiary in respect of taxes,
assessments, governmental charges, and claims for labor, materials or
supplies and liabilities under employee benefit plans, including pension
plans, to the extent that payment thereof is not yet due;
(6) Indebtedness consisting of guaranties permitted under
Paragraph 10(e) below;
---------------
(7) Indebtedness of the Parent or any Subsidiary in respect of the
sale-lease-back transactions permitted by Paragraph 10(i) below hereof;
---------------
(8) Indebtedness in respect of Capitalized Leases not to exceed
$12,500,000.00 in the aggregate at any time; and
(9) Other Permitted Debt.
10(c) Distributions. And shall not permit any of their respective
-------------
Subsidiaries to, make any Distributions, other than Distributions from any
Subsidiary of the Parent to any Guarantor, except: (1) Distributions of the
Parent consisting of non-dividend paying preferred stock and (2) Distributions
by the Parent on its common stock in an amount not to exceed, twenty five
percent (25%) of Consolidated Net Income, calculated on a cumulative basis from
December 30, 1996, of the Parent and its Subsidiaries; provided, however, that
the Parent may make no Distributions if a Potential Default or Event of Default
then exists or would result therefrom.
10(d) Investments. And shall not permit any of their respective
-----------
Subsidiaries to make any Investment in any Person, except for investments which
consist of:
(1) Obligations issued or guaranteed as to principal and interest
by the United States of America and having a maturity of not more than one
year from the date of acquisition;
26
(2) Certificates of deposit with a maturity of not more than one
year from the date of acquisition issued by: (i) a bank organized under
the laws of the United States of America rated not less than prime-one or
A-1 or their equivalents by Xxxxx'x Investor Service, Inc. or Standard &
Poor's Corporation or their successors, or (ii) BankBoston or Sumitomo;
(3) Commercial paper with a maturity of not more than 270 days from
the date of issuance which is rated not less than prime-one or A-1 or their
equivalents by Xxxxx'x Investor Service, Inc. or Standard & Poor's
Corporation or their successors;
(4) Repurchase agreements secured by any one or more of the
foregoing;
(5) Shares of any so-called "money market fund" provided that such
fund is registered under the Investment Company Act of 1940, has net assets
of at least $50,000,000.00 and has at least eighty-five percent (85%) of
its net assets invested in investments of the types described in clauses
(1), (2) and (3) above;
(6) Investments, not to exceed $500,000.00 in the aggregate
amount at any time, consisting of promissory notes taken as full or partial
payment of the purchase price of assets sold in accordance with the
provisions of Paragraph 10(f)(3) below; and
------------------
(7) Other Permitted Investments.
10(e) Guaranties. And will not permit any of their respective Subsidiaries
----------
to, become or remain liable in respect to any guaranty of the Indebtedness of
any other Person except: (1) guarantees of Indebtedness of the Company issued by
the Parent or any Subsidiary of the Parent, which guaranties subordinate or
waive any rights of subrogation which the issuers of such guaranties may have
against the Company until the Bank/Metropolitan Obligations have been paid in
full and the Banks have no further obligation to advance Revolving Loans and the
L/C Issuing Bank has no further obligation to issue Letters of Credit hereunder,
and (2) Other Permitted Guaranties.
10(f) Merger, Consolidation and Disposition of Assets. And shall not permit
-----------------------------------------------
any of their respective Subsidiaries to, merge or consolidate with or into any
Person, or sell or lease or otherwise dispose of any substantial part of its
assets or any restaurants (except inventory or obsolete equipment in the
ordinary course of business and sale-leaseback transactions which shall be
governed by Paragraph 10(i) below); provided, however, that so long as there
---------------
does not exist a Potential Default or an Event of Default at the time and that
no Potential Default or Event of Default would be created as a result of such
action:
(1) The Company may merge or consolidate with any Subsidiary of the
Company, but only if the Company is the surviving entity, the Parent may
merge or consolidate with any Subsidiary of the Parent (other than the
Company),
27
but only if the Parent is the surviving entity, and any Guarantor may merge
or consolidate with any Subsidiary of the Parent (other than the Company),
but only if the Guarantor is the surviving entity;
(2) The Company may acquire the business or assets of any Subsidiary
of the Company, the Parent may acquire the business or assets of any
Subsidiary of the Parent (other than the Company), and any Guarantor may
acquire the business or assets of any Subsidiary of the Parent (other than
the Company);
(3) The Parent or the Company, as applicable, may enter into Other
Permitted Asset Sales Transactions for cash (except to the extent permitted
pursuant to Paragraph 10(b)(6) above), with unrelated third parties and for
------------------
fair market value; provided, however, that unless the Metropolitan
Obligations shall have been paid in full, within ninety (90) days following
the consummation of such Other Permitted Sales Transaction one hundred
percent (100%) of the net sale proceeds shall be either, at the Company's
option, applied as a prepayment against the Metropolitan Obligations or to
permanently reduce the Revolving Loan Credit Limit by a like dollar amount
(and, if necessary, to pay outstanding Revolving Loans such that the
aggregate dollar amount of Revolving Loans and Outstanding Letters of
Credit does not exceed the Revolving Loan Credit Limit as so reduced);
(4) The Parent or any Subsidiary may sell on one or more occasions to
an independent unrelated third party and for fair market value other
property and equipment with an aggregate net book value for all such
property and equipment not in excess of $2,500,000.00; and
(5) (i) Any Guarantor may transfer any or all of its assets to the
Company, and (ii) any Guarantor may transfer assets to the other Guarantor
so long as the aggregate net book value of assets transferred by any
Guarantor pursuant to this Paragraph (5)(ii) does not exceed $5,000,000.00.
-----------------
10(g) Change of Corporate Name. Change their respective corporate names
------------------------
without providing thirty (30) days written notice thereof to the Agent and the
Security Agent.
10(h) Change in Terms and Payment of Capital Stock. Effect or permit any
--------------------------------------------
change in or amendment to any document or instrument pertaining to the terms of
any of their respective capital stock (other than an amendment to increase the
number of authorized shares of the Parent's common stock).
10(i) Sale and Lease-Back. And shall not permit any of their respective
-------------------
Subsidiaries to, enter into any sale-leaseback transaction as seller/lessee;
provided, however, that unless the Metropolitan Obligations shall have been paid
in full, within ninety (90) days following the consummation of such sale-
leaseback the net sale proceeds shall be either, at the Company's option,
applied as a prepayment against the Metropolitan Obligations or to permanently
reduce the Revolving Loan Credit Limit by a like dollar amount (and, if
necessary,
28
to pay outstanding Revolving Loans such that the aggregate dollar amount of
Revolving Loans and Outstanding Letters of Credit does not exceed the Revolving
Loan Credit Limit as so reduced).
10(j) Change in Terms and Payment of 10.40% Notes and 6.69% Notes. Effect
-----------------------------------------------------------
or permit any change in or amendment to any document or instrument pertaining to
the terms of the Company's 10.40% Notes, the 10.40% Note Purchase Agreement, the
6.69% Notes, the 6.69% Note Purchase Agreement, or directly or indirectly, make
any payment of principal of or interest on or in redemption, retirement or
repurchase of any 10.40% Notes or the 6.69% Notes except for (1) the quarterly
interest payments required by the terms of the 10.40% Notes, the mandatory
payments of principal called for by Sections 4.2 and 4.3 of the 10.40% Note
Purchase Agreement and the prepayments permitted by Section 4.5 of the 10.40%
Note Purchase Agreement, (2) the semi-annual interest payments required by the
terms of the 6.69% Notes, the mandatory payments of principal called for by
Sections 4.2 and 4.3 of the 6.69% Note Purchase Agreement and the prepayments
permitted by Section 4.5 of the 6.69% Note Purchase Agreement, (3) prepayments
permitted under Paragraphs 10(f)(3) and 10(i) above, and (4) other prepayments;
------------------- -----
provided, however, that other prepayments to be made pursuant to this
subparagraph (4) may only be made if there would be no breach of the coverage
----------------
ratio test set forth in Paragraph 10(l) below were the full amount of such
---------------
prepayment included in Required Principal Payments of Debt for the period in
which such prepayment is to be made.
10(k) Leverage Ratio Test. Permit as of the last day of any fiscal quarter
-------------------
the Parent's consolidated ratio of: (1) Total Funded Debt to (2) EBITDA of the
Parent and its consolidated Subsidiaries during such fiscal quarter and the
immediately preceding three fiscal quarters to be greater than: (i) from the
Effective Date to and including September 30, 1997, 3.00:1.00, (ii) from October
1, 1997 to and including September 30, 1998, 2.75:1.00, (iii) from October 1,
1998 to and including September 30, 1999, 2.50:1.00, and (iv) thereafter,
2.00:1.00.
10(l) Coverage Ratio Test. Permit as of the last day of any fiscal quarter
-------------------
the ratio of (1) EBITDA of the Parent and its consolidated Subsidiaries during
such fiscal quarter and the immediately preceding three fiscal quarters, less
cash taxes paid (net of refunds) and Capital Expenditures, to (2) Interest
Expense and Required Principal Payments of Debt during such fiscal quarter and
the immediately preceding three fiscal quarters to be less than 1.25:1.00.
10(m) Minimum Consolidated Net Worth. Permit as of the last day of any
------------------------------
fiscal quarter the Consolidated Net Worth of the Parent to be less than the sum
of:
(1) $88,000,000.00; plus
(2) On a cumulative basis, seventy five percent (75%) of Consolidated
Net Income for each fiscal quarter ending after December 31, 1996, with no
deductions for losses.
10(n) Business Activities. Engage in any business other than the operation
-------------------
of Chart House restaurants (including the Peohes Restaurant) and the Solana
Beach Company.
29
11. Events of Default. Upon the occurrence of any of the following events (an
-----------------
"Event of Default"):
11(a) The Company shall fail to pay any principal on the Revolving Loans
or any L/C Drawing on the date when due or fail to pay within three Business
Days of the date when due any other Obligation under the Loan Documents; or
11(b) Any representation or warranty made by the Company or any Guarantor
in any Loan Document shall be inaccurate or incomplete in any material respect
on or as of the date made; or
11(c) The Company or any Guarantor shall fail to maintain its corporate
existence or shall default in the observance or performance of any covenant or
agreement contained in Xxxxxxxxxx 0(x), (x), (x), (x), (x), (x), (x), (x) or (l)
--------------- --- --- --- --- --- --- --- ---
above or Paragraph 10 above; or
------------
11(d) The Company or any Guarantor shall fail to observe or perform any
term or provision contained in Paragraphs 9(b), (c) or (g) above and such
---------- ---- --- ---
failure shall continue for ten (10) days or the Company or any Guarantor shall
fail to observe or perform any other term or provision contained in the Loan
Documents and such failure shall continue for thirty (30) days after the earlier
of (1) written notice of such failure given to the company by the Agent and (2)
the date the Company or the applicable Guarantor has knowledge of such failure;
or
11(e) The Company, any Guarantor or any of their Subsidiaries shall default
in any payment of principal of or interest on any Indebtedness (other than the
Obligations) in an aggregate amount for all such Persons in excess of
$1,000,000.00 or any other event shall occur, the effect of which is to permit
such Indebtedness to be declared or otherwise to become due prior to its stated
maturity; or
11(f) (1) The Company, any Guarantor or any of their Subsidiaries, shall
commence any case, proceeding or other action (i) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or the
Company, any Guarantor or any of their Subsidiaries shall make a general
assignment for the benefit of its creditors; or (2) there shall be commenced
against the Company, any Guarantor or any of their Subsidiaries, any case,
proceeding or other action of a nature referred to in clause (1) above which (i)
results in the entry of an order for relief or any such adjudication or
appointment, or (ii) remains undismissed, undischarged or unbonded for a period
of thirty (30) days; or (3) there shall be commenced against the Company, any
Guarantor or any of their Subsidiaries, any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or substantially all of its assets which results in the
entry of an order for any such relief which shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within sixty (60) days
from the
30
entry thereof; or (4) the Company, any Guarantor or any of their Subsidiaries,
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in (other than in connection with a final settlement), any
of the acts set forth in clause (1), (2) or (3) above; or (5) the Company, any
Guarantor or any of their Subsidiaries, shall generally not, or shall be unable
to, or shall admit in writing its inability to pay its debts as they become due;
or
11(g) (1) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(2) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or nor waived, shall exist with respect to any Plan, (3) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the case of
a Reportable Event, the continuance of such Reportable Event unremedied for ten
days after notice of such Reportable Event pursuant to Section 4043(a), (c) or
(d) of ERISA is given or the continuance of such proceedings for ten days after
commencement thereof, as the case may be, (4) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (5) any withdrawal liability to a
Multiemployer Plan shall be incurred by the Company or (6) any other event or
condition shall occur or exist; and in each case in clauses (1) through (6)
above, such event or condition, together with all other such events or
conditions, if any, is likely to subject the Company, any Guarantor or any of
their Subsidiaries to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial or other
condition of the Company or any Guarantor; or
11(h) One or more judgments or decrees shall be entered against the
Company, any Guarantor or any of their Subsidiaries and such judgments or
decrees (other than decrees involving amounts in the aggregate for all such
Persons of less than $1,000,000.00) shall not have been vacated, discharged,
stayed, satisfied or bonded pending appeal within thirty (30) days from the
entry thereof or in any event later than five days prior to the date of any
proposed sale thereunder; or
11(i) The Company shall voluntarily suspend the transaction of business for
more than five days in any calendar year commencing in fiscal year 1997; or
11(j) Any Guarantor shall fail to observe or perform any provision of its
Guaranty or shall attempt to rescind or revoke its guaranty, with respect to
future transactions or otherwise; or
11(k) There shall occur an "Event of Default" under (and as that term is
defined in) either the 10.40% Note Purchase Agreement or the 6.69% Note Purchase
Agreement; or
11(l) The Parent shall cease to own one hundred percent (100%) of the
outstanding capital stock of the Company or there shall occur a Change of
Control of the Parent; or
31
11(m) The independent public accountants of the Parent at the Effective
Date shall resign and a replacement firm of independent public accountants
reasonably acceptable to the Agent and the Banks shall not have been appointed
(and accepted such appointment) within sixty (60) days following such
resignation;
THEN,
automatically upon the occurrence of an Event of Default under Paragraph 11(f)
---------------
above and, in all other cases, at the option of the Agent or as otherwise may be
required by the Majority Banks, each Bank's obligation to make Revolving Loans
and the L/C Issuing Bank's obligation to issue Letters of Credit hereunder shall
terminate, the principal balance of outstanding Revolving Loans and interest
accrued but unpaid thereon and the aggregate contingent liability of the Company
to reimburse the Banks for future L/C Drawings with respect to Outstanding
Letters of Credit and all other Obligations shall become immediately due and
payable, without demand upon or presentment to the Company, which are expressly
waived by the Company and the Agent and the Banks may immediately exercise all
rights, powers and remedies available to them at law, in equity or otherwise.
Upon the occurrence of an Event of Default and acceleration of the Obligations,
including, without limitation, the contingent obligations of the Company with
respect to Outstanding Letters of Credit, the Company shall deliver to the Agent
as collateral for such contingent obligations cash in an amount equal to the
amount then available for drawing under Outstanding Letters of Credit. All
amounts paid by the Company on account of the aggregate contingent liability of
the Company under Outstanding Letters of Credit shall be held by the Agent as
collateral security for the benefit of the L/C Issuing Bank and the Banks until
there are no Letters of Credit Outstanding and all unrepaid L/C Drawings have
been paid in full with interest thereon as provided herein, the Company hereby
being automatically deemed to have granted to the Agent, the L/C Issuing Bank
and the Banks a first priority, perfected security interest in all such monies
and to have authorized the Agent to debit such monies in satisfaction of the
obligation of the Company to repay L/C Drawings; provided, that, nothing
contained herein shall in any manner or to any extent affect the liability of
the Company with respect to L/C Drawings in the event for whatever reason the
Agent does not so debit such monies on account thereof.
12. The Credit Agents.
-----------------
12(a) Appointment. Each Bank hereby irrevocably designates and appoints
-----------
the Agent as the Agent and the Security Agent as the Security Agent of such Bank
under the Loan Documents and each such Bank hereby irrevocably authorizes the
Agent and the Security Agent (jointly and severally, the "Credit Agents"), as
the agents for such Bank, to take such action on its behalf under the provisions
of the Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Credit Agents by the terms of the Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in the Loan Documents,
the Credit Agents shall not have any duties or responsibilities, except those
expressly set forth herein or therein, or any fiduciary relationship with any
Bank, and no implied covenants, functions,
32
responsibilities, duties, obligations or liabilities shall be read into the Loan
Documents or otherwise exist against the Credit Agents.
12(b) Delegation of Duties. The Credit Agents may execute any of their
--------------------
duties under the Loan Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Credit Agents shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by them with reasonable
care.
12(c) Exculpatory Provisions. Neither of the Credit Agents nor any of their
----------------------
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (1) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with the Loan Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(2) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Company, any Guarantor or any officer
thereof contained in the Loan Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Credit
Agents under or in connection with the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of the Loan
Documents or for any failure of the Company or any Guarantor to perform its
obligations hereunder or under the other Loan Documents. The Credit Agents shall
not be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, the Loan Documents or to inspect the properties, books or records of the
Company or any Guarantor.
12(d) Reliance by Credit Agents. The Credit Agents shall be entitled to
-------------------------
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certification, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation reasonably believed by them to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Company and the Guarantors), independent accountants and other experts
selected by the Credit Agents. The Credit Agents may deem and treat the payee of
any note as the owner thereof for all purposes. As to the Banks: (1) the Credit
Agents shall be fully justified in failing or refusing to take any action under
the Loan Documents unless they shall first receive such advice or concurrence of
the Majority Banks or all of the Banks, as appropriate, or they shall first be
indemnified to their satisfaction by the Banks ratably in accordance with their
respective Percentage Shares against any and all liability and expense which may
be incurred by them by reason of taking or continuing to take any action (except
for liabilities and expenses resulting from the applicable Credit Agent's gross
negligence or willful misconduct), and (2) the Credit Agents shall in all cases
be fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with a request of the Majority Banks or all of the
Banks, as appropriate, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks.
33
12(e) Notice of Default. The Credit Agents shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Potential Default or Event of
Default hereunder unless the Credit Agents have received written notice from a
Bank or the Company or a Guarantor referring to the Loan Documents, describing
such Potential Default or Event of Default and stating that such notice is a
"notice of default." In the event that either of the Credit Agents receives
such a notice, such Credit Agent shall give notice thereof to the other Credit
Agent and to the Banks. The Credit Agents shall take such action with respect
to such Potential Default or Event of Default as shall be reasonably directed by
the Majority Banks provided that such action is consistent with the provisions
of this Agreement; provided, however, that, unless and until the Credit Agents
shall have received such directions, the Credit Agents may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Potential Default or Event of Default as they shall deem advisable in
the best interest of the Banks.
12(f) Non-Reliance on Credit Agents and Other Banks. Each Bank expressly
---------------------------------------------
acknowledges that neither of the Credit Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by either of the Credit
Agents hereinafter taken, including any review of the affairs of the Company or
any Guarantor, shall be deemed to constitute any representation or warranty by
the Credit Agents to any Bank. Each Bank represents to the Credit Agents that
it has, independently and without reliance upon the Credit Agents or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Company and
the Guarantors and made its own decision to make its loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Credit Agents or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Company and the Guarantors.
Except for notices, reports and other documents expressly required to be
furnished to the Banks by the Credit Agents under the Loan Documents, the Credit
Agents shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Company and the
Guarantors which may come into the possession of the Credit Agents or any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates.
12(g) Indemnification. The Banks agree to indemnify each of the Credit
---------------
Agents in its capacity as such (to the extent not reimbursed by the Company or
the Guarantors and without limiting the obligation of the Company and the
Guarantors to do so), ratably according to the respective amounts of their
Percentage Shares, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including without
limitation at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against such Credit Agent in any way relating to or
arising out of the Loan Documents or any
34
documents contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted by such Credit Agent under or in
connection with any of the foregoing; provided that no Bank shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Credit Agents's gross negligence or willful misconduct. The agreements
in this subsection shall survive the payment of the Obligations.
12(h) Credit Agents in Their Individual Capacities. Each of the Credit
--------------------------------------------
Agents and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Company and the Guarantors as though
such Credit Agent were not a Credit Agent hereunder. With respect to such loans
made or renewed by them, the Credit Agents shall have the same rights and powers
under the Loan Documents as any Bank and may exercise the same as though it were
not a Credit Agent, and the terms "Bank" and "Banks" shall include each Credit
Agent in its individual capacity.
12(i) Successor Credit Agents. The Agent may resign as Agent and the
-----------------------
Security Agent may resign as Security Agent under the Loan Documents upon sixty
(60) days' notice to the Banks and each of the Agent and the Security Agent
agrees that it will so resign in the event it ceases to hold any Percentage
Share of the Obligations. If either of the Credit Agents shall resign as
provided herein, then the Banks shall appoint from among the Banks a successor
Agent or Security Agent, as applicable, or, if such Banks are unable to agree on
the appointment of such a successor, the Agent or the Security Agent, as
applicable, shall appoint a successor for such Credit Agent (which successor
shall, in either case and assuming that there does not exist a Potential Default
or Event of Default, be reasonably acceptable to the Company), whereupon such
successor shall succeed to the rights, powers and duties of its predecessor, and
the term "Agent" or "Security Agent," as applicable, shall mean such successor
effective upon its appointment, and the former Agent's or Security Agent's
rights, powers and duties shall be terminated, without any other or further act
or deed on the part of such former Credit Agent or any of the parties to this
Agreement or any of the Loan Documents or successors thereto. After any retiring
Credit Agent's resignation hereunder, the provisions of this Paragraph 12 shall
------------
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Credit Agent under the Loan Documents.
13. Miscellaneous Provisions.
------------------------
13(a) No Assignment. The Company may not assign its rights or obligations
-------------
under this Agreement without the prior written consent of the Agent and one
hundred percent (100%) of the Banks. Subject to the foregoing, all provisions
contained in this Agreement or any document or agreement referred to herein or
relating hereto shall inure to the benefit of each Bank, its successors and
assigns, and shall be binding upon the Company, its successors and assigns.
13(b) Amendment. Neither this Agreement nor any of the other Loan Documents
---------
may be amended or terms or provisions hereof waived unless such amendment or
waiver is in writing and signed by the Majority Banks, the Agent and the
Company; provided,
35
however, that without the prior written consent of the Agent and one hundred
percent (100%) of the Banks and (other than with respect to subparagraph (3)
below) the Company, no amendment or waiver shall: (1) reduce the principal of,
or rate of interest or fees on, the Revolving Loans or any Letter of Credit or
extend or otherwise modify the required amount or due date for any Revolving
Loan or any L/C Drawing, (2) modify the any Bank's Percentage Share (except as
the result of an assignment permitted under Paragraph 13(h)(i) below), (3)
------------------
modify any provision of the Loan Documents requiring one hundred percent (100%)
of the Banks to act, (4) modify the definition of "Majority Banks," (5) release
any Guarantor from its obligations under its Guaranty or release any collateral
at any time held for the Obligations, or (6) amend this Paragraph 13(b); and,
---------------
provided further, that no provision of the Loan Documents affecting a Credit
Agent may be amended without such Credit Agent's prior written consent. It is
expressly agreed and understood that the failure by the required Banks to elect
to accelerate amounts outstanding hereunder and/or to terminate the obligation
of the Banks to make Revolving Loans hereunder shall not constitute an amendment
or waiver of any term or provision of this Agreement.
13(c) Cumulative Rights; No Waiver. The rights, powers and remedies of the
----------------------------
Banks hereunder are cumulative and in addition to all rights, power and remedies
provided under any and all agreements between the Company and the Banks relating
hereto, at law, in equity or otherwise. Any delay or failure by the Banks to
exercise any right, power or remedy shall not constitute a waiver thereof by the
Banks, and no single or partial exercise by the Banks of any right, power or
remedy shall preclude other or further exercise thereof or any exercise of any
other rights, powers or remedies.
13(d) Entire Agreement. This Agreement and the documents and agreements
----------------
referred to herein embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings relating to
the subject matter hereof and thereof.
13(e) Survival. All representations, warranties, covenants and agreements
--------
herein contained on the part of the Company shall survive the termination of
this Agreement and shall be effective until the Obligations are paid and
performed in full or longer as expressly provided herein.
13(f) Notices. All notices given by any party to the others shall be in
-------
writing unless otherwise provided for herein, delivered by facsimile
transmission, by personal delivery or by overnight courier, addressed to the
party as set forth on Schedule 1 attached hereto, as such Schedule 1 may be
---------- ----------
amended from time to time. Any party may change the address to which notices
are to be sent by notice of such change to each other party given as provided
herein. Such notices shall be effective on the date received.
13(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the substantive laws of the State of California.
13(h) Assignments, Participations, Etc.
--------------------------------
(1) Any Bank may at any time, with the consent of the Agent
36
(which consent shall not be unreasonably withheld), assign and delegate to
one or more Acceptable Financial Institutions (each an "Assignee") all, or
any ratable part of all, of the Revolving Loans and the other rights and
obligations of such Bank hereunder in a minimum amount of $5,000,000.00;
provided, however, that the Company and the Agent may continue to deal
solely and directly with such Bank in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Company and the Agent
by such Bank and the Assignee; and (ii) such Bank and its Assignee shall
have delivered to the Company and the Agent an Assignment and Acceptance
Agreement. From and after the date that the Agent notifies the assignor
Bank that it has received an executed Assignment and Acceptance Agreement,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder and under the other Loan Documents have
been assigned to it pursuant to such Assignment and Acceptance Agreement,
shall have the rights and obligations of a Bank under the Loan Documents,
and (ii) the assignor Bank shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance Agreement, relinquish its rights
and be released from its obligations under the Loan Documents. Upon the
effective date of such assignment, this Agreement and the other Loan
Documents shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Percentage Share arising therefrom.
(2) Any Bank may at any time sell to one or more Acceptable
Financial Institutions or other Persons (each a "Participant")
participating interests in any Revolving Loans, the funding commitment of
that Bank and the other interests of that Bank (the "originating Bank")
hereunder and under the other Loan Documents; provided, however, that (i)
the originating Bank's obligations under this Agreement shall remain
unchanged, (ii) the originating Bank shall remain solely responsible for
the performance of such obligations, and (iii) the Company and the Agent
shall continue to deal solely and directly with the originating Bank in
connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents.
(3) Notwithstanding any other provision contained in this Agreement
or any other Loan Document to the contrary, any Bank may assign all or any
portion of the Revolving Loans held by it to any Federal Reserve Bank or
the United States Treasury as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank.
(4) Each Bank will give not less than three (3) Business Days' prior
notice to the Company of its intent to share confidential information
regarding the credit facility evidenced hereby to prospective Assignees and
Participants.
37
13(i) Counterparts. This Agreement and the other Loan Documents may be
------------
executed in any number of counterparts, all of which together shall constitute
one agreement.
13(j) Sharing of Payments. If any Bank shall receive and retain any
-------------------
payment, whether by setoff, application of deposit balance or security, or
otherwise, in respect of the Obligations in excess of such Bank's Percentage
Share thereof, then such Bank shall purchase from the other Banks for cash and
at face value and without recourse, such participation in the Obligations held
by them as shall be necessary to cause such excess payment to be shared ratably
as aforesaid with each of them; provided, that if such excess payment or part
thereof is thereafter recovered from such purchasing Bank, the related purchases
from the other Banks shall be rescinded ratably and the purchase price restored
as to the portion of such excess payment so recovered, but without interest.
Each Bank is hereby authorized by the Company to exercise any and all rights of
setoff, counterclaim or bankers' lien against the full amount of the
Obligations, whether or not held by such Bank. Each Bank hereby agrees to
exercise any such rights first against the Obligations and only then to any
other Indebtedness of the Company to such Bank.
13(k) Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
-----------------------
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
COMPANY, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
---------
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
----------
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT AND THE LENDERS EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY CALIFORNIA LAW.
13(l) Waiver of Jury Trial. THE COMPANY, THE LENDERS AND THE AGENT EACH
--------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION,
38
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
13(m) Indemnity. Whether or not the transactions contemplated hereby are
---------
consummated, the Company shall indemnify and hold the Agent, the Security Agent
and each Bank and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including reasonable attorney's fees and expenses, including the documented
cost of internal counsel) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Revolving Loans and the
resignation or replacement of the Agent or replacement of any Bank) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
insolvency proceeding or appellate proceeding) related to or arising out of this
Agreement or the Revolving Loans or the use of the proceeds thereof, whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); provided, however, that the Company shall have
no obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Paragraph 13(m) shall survive
---------------
payment of all other Obligations.
13(n) Marshalling; Payments Set Aside. Neither the Agent nor the Banks
-------------------------------
shall be under any obligation to xxxxxxxx any assets in favor of the Company or
any other Person or against or in payment of any or all of the Obligations. To
the extent that the Company makes a payment or payments to the Agent or the
Banks (through the Agent), or the Agent on behalf of the Banks enforces their
Liens or exercise their rights of set-off, and such payment or payments or the
proceeds of such enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Agent in its
discretion) to be repaid to a trustee, receiver or any other party in connection
with any insolvency proceeding, or otherwise, then (1) to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or set-off had not occurred, and (2) each Bank
severally agrees to pay to the Agent upon demand its ratable share of the total
amount so recovered from or repaid by the Agent.
13(o) Set-off. In addition to any rights and remedies of the Banks provided
-------
by law, if an Event of Default exists, each Bank is authorized at any time and
from time to time, without prior notice to the Company, any such notice being
waived by the Company to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special,
39
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing to, such Bank to or for the credit or the account
of the Company against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Agent or such Bank shall
have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured; provided, however, that in no event
will any Bank exercise any right of set-off against the Obligations without the
prior written consent of the Agent and the Security Agent. Each Bank agrees
promptly to notify the Company after any such set-off and application made by
such Bank; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
13(p) Severability. The illegality or unenforceability of any provision of
------------
this Agreement or any other Loan Document or any instrument or agreement
required hereunder or thereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions hereof or thereof.
13(r) No Third Parties Benefited. This Agreement and the other Loan
--------------------------
Documents are made and entered into for the sole protection and legal benefit of
the Company, the Banks and the Agent, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary of,
or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. Neither the Agent nor any Bank
shall have any obligation to any Person not a party to this Agreement or other
Loan Documents.
14. Definitions. For purposes of this Agreement, the terms set forth below
-----------
shall have the following meanings:
"Acceptable Financial Institution" shall mean any commercial bank, savings
--------------------------------
and loan association, savings bank, finance company, insurance company or
pension, mutual or other fund, whether in the form of a partnership or other
entity; provided, however, that until the obligations of the Banks to make
Revolving Loans and the obligation of the L/C Issuing Bank to issue Letters of
Credit shall have terminated, "Acceptable Financial Institution" shall include
only such Persons as the Agent reasonably believes are legally permitted to fund
their respective Percentage Shares of Revolving Loans and to buy participations
in Letters of Credit and unrepaid L/C Drawings.
"Additional Mortgage Documents" shall have the meaning given such term in
-----------------------------
Paragraph 6(c) above.
--------------
"Additional Florida Properties" shall have the meaning given such term in
-----------------------------
Paragraph 6(c) above.
--------------
"Affiliate" shall mean, as to any Person, any other Person directly or
---------
indirectly controlling, controlled by or under direct or indirect common control
with, such Person. "Control" as used herein means with respect to any business
entity the power to direct the management and policies of such business entity.
40
"Agent" shall have the meaning given such term in the introductory
-----
paragraph hereof and shall include any successor to BankBoston as the initial
"Agent" hereunder.
"Agreement" shall mean this Agreement, as the same may be amended, extended
---------
or replaced from time to time.
"Alternate Base Rate" shall mean the higher of: (a) the annual rate of
-------------------
interest announced from time to time by BankBoston at it head office in Boston,
Massachusetts as its "base rate" and (b) one half of one percent (0.50%) above
the Effective Federal Funds Rate.
"Alternate Base Rate Loans" shall mean Revolving Loans outstanding
-------------------------
hereunder at such time as they are made and/or being maintained at a rate of
interest based upon the Alternate Base Rate.
"Amended and Restated Guaranty" shall have the meaning given such term in
-----------------------------
Paragraph 6(b) above and shall be deemed to refer, jointly and severally, to the
--------------
Amended and Restated Guaranties executed severally by each of the Parent and Big
Wave.
"Applicable Eurodollar Rate" shall mean, with respect to any Eurodollar
--------------------------
Loan for the Interest Period applicable to such Eurodollar Loan, the rate per
annum (rounded upward, if necessary, to the next higher 1/32 of one percent)
calculated as of the first day of such Interest Period in accordance with the
following formula:
Applicable Eurodollar Rate = ER + AES
------
1-ERP
where
ER = Eurodollar Rate
ERP = Eurodollar Reserve Percentage
AES = Applicable Eurodollar Spread
"Applicable Eurodollar Spread" shall mean with respect to any Eurodollar
----------------------------
Loan for the Interest Period applicable to such Eurodollar Loan: (a) from the
Effective Date to but not including the date upon which the Compliance
Certificate showing the calculation of the Leverage Ratio and the Coverage Ratio
for the fiscal quarter ending December 31, 1997 has been provided to the Agent
and the Banks as required pursuant to Paragraph 9(a)(3) above, 1.25%, and (b)
-----------------
thereafter, that percentage determined in accordance with the following table:
Applicable
----------
Leverage Coverage Eurodollar
-------- -------- ----------
Ratio Ratio Spread
----- ----- ------
Less than 2.00:1.00 and Greater than 2.00:1.00 0.75%
Greater than or Equal to and Less than or Equal to 1.00%
2.00:1.00 but Less 2.00:1.00 but Greater than
than 2.50:1.00 1.50:1.00
Greater than or Equal to and Less than or Equal to 1.25%
2.50:1.00 1.50:1.00
41
"Assignee" shall have the meaning given such term in Paragraph 13(h)(1)
-------- ------------------
above.
"Assignment and Acceptance Agreement" shall mean an agreement in the form
-----------------------------------
of that attached hereto as Exhibit J.
---------
"Bank/Metropolitan Obligations" shall mean, collectively, the Bank
-----------------------------
Obligations and the Metropolitan Obligations.
"Bank Obligations" shall have the meaning given such term in each of the
----------------
Security Documents.
"Big Wave Security Agreement" shall mean the security agreement attached
---------------------------
hereto as Exhibit K, as the same may be amended, extended or replaced from time
---------
to time.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in Boston, Massachusetts or Los Angeles, California are
authorized or obligated to close their regular banking business.
"Capital Expenditures" shall mean, for any period, the aggregate of all
--------------------
expenditures by the Parent and its Subsidiaries for the acquisition of fixed or
capital assets or additions to equipment (including replacements, capitalized
repairs and improvements during such period) which should be capitalized under
GAAP on a consolidated balance sheet of the Parent and its Subsidiaries. For
the purpose of this definition, the purchase price of equipment which is
purchased simultaneously with the trade-in of existing equipment owned by the
Company or any of its Subsidiaries or with insurance proceeds shall be included
in Capital Expenditures only to the extent of the gross amount of such purchase
price less the credit granted by the seller of such equipment for such equipment
being traded in at such time, or the amount of such proceeds, as the case may
be.
"Capitalized Leases" shall mean leases under which the Parent or any of its
------------------
Subsidiaries is the lessee or obligor, the future rental payment obligations
under which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.
"Change of Control" shall mean if any Person other than either Chart House
-----------------
Investors, L.L.C. or Metropolitan shall own more than twenty percent (20%) of
the outstanding capital stock of the Parent.
"Collateral" shall mean the real and personal property (tangible and
----------
intangible) and fixtures which are the subject of the Company Security
Documents.
"Commitment Schedule" shall mean a schedule setting forth the current
-------------------
Revolving Loan Credit Limit and for each Bank, such Bank's Maximum Commitment
and
42
Percentage Share, as such schedule may be modified from time to time consistent
with the Loan Documents, with the initial Commitment Schedule attached hereto as
Schedule 2.
----------
"Commonly Controlled Entity" of a Person shall mean a Person, whether or
--------------------------
not incorporated, which is under common control with such Person within the
meaning of Section 414(c) of the Internal Revenue Code.
"Company Pledge Agreement" shall mean the pledge agreement attached hereto
------------------------
as Exhibit L, as the same may be amended, extended or replaced from time to
---------
time.
"Company Security Agreement" shall mean the security agreement attached
--------------------------
hereto as Exhibit M, as the same may be amended, extended or replaced from time
---------
to time.
"Company Security Documents" shall have the meaning given such term in
--------------------------
Paragraph 6(a) above.
--------------
"Compliance Certificate" shall mean a certificate in the form of that
----------------------
attached hereto as Exhibit N.
---------
"Consolidated Net Worth" shall mean the excess of the consolidated total
----------------------
assets of the Parent and its Subsidiaries, determined in accordance with GAAP,
over Consolidated Total Liabilities, excluding in any event all non-cash gains
or losses arising in connection with any Other Permitted Asset Sale.
"Consolidated Total Liabilities" shall mean all liabilities of the Parent
------------------------------
and its Subsidiaries determined on a consolidated basis required to be shown on
a balance sheet of the Parent in accordance with GAAP.
"Contact Office" shall mean the office of the Agent located at 100 Federal
--------------
Street, Boston, Massachusetts 02106-2016 or such other office as the Agent may
notify the Company and the Banks from time to time in writing.
"Contractual Obligation" as to any Person shall mean any provision of any
----------------------
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Coverage Ratio" shall mean the ratio computed as provided in Paragraph
-------------- ---------
10(l) above.
-----
"Credit Agents" shall have the meaning given such term in Paragraph 12(a)
------------- ---------------
above.
"Credit Event" shall mean the funding, continuation or conversion of any
------------
Revolving Loan or the issuance, extension or renewal of any Letter of Credit.
"Distributions" shall mean with respect to any Person, any declaration or
-------------
payment of any dividend on or in respect of any shares of any class of capital
stock of such Person, other
43
than dividends payable solely in shares of common stock of such Person, or the
purchase or other retirement of any shares of any class of capital stock of such
Person, directly or indirectly through a Subsidiary or otherwise, the return of
capital by such Person to its shareholders as such, or any other distribution on
or in respect of any shares of any class of capital stock of such Person.
"Xxxxx Ferry Property" shall have the meaning given such term in Paragraph
-------------------- ---------
6(c) above.
----
"EBITDA" shall mean for any period the sum of (a) net income (or net loss)
------
for such period, plus (b) all amounts treated as expenses for interest,
amortization, depreciation, taxes (to the extent included in the determination
of net income (or net loss)), and other non-cash charges for such period, plus
(c) to the extent not otherwise included in subparagraph (b) above and only for
purposes of determining compliance with Paragraphs 10(k) and 10(l) above through
---------------- -----
June 30, 1998, cash restructuring charges (not to exceed $900,000.00), and minus
(d) non-cash credits for such period.
"Effective Date" shall mean the date on which all conditions precedent to
--------------
the occurrence of the first Credit Event set forth in Paragraph 7(a) above have
--------------
been met to the satisfaction of the Agent and the Banks.
"Effective Federal Funds Rate" shall mean on any date the rate per annum
----------------------------
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (of if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York or,
if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such transactions received by the Agent from
three funds brokers of recognized standing selected by the Agent.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
the same may from time to time be supplemented or amended.
"Eurodollar Business Day" shall mean a Business Day upon which commercial
-----------------------
banks in London, England are open for domestic and international business.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan for the
---------------
Interest Period applicable to such Eurodollar Loan, the arithmetic average as
determined by the Agent of the rates at which deposits in immediately available
U.S. dollars in an amount equal to the amount of such Eurodollar Loan having a
maturity approximately equal to such Interest Period are offered to the Agent by
three reference banks to be selected by the Agent in the London interbank
market, at approximately 11:00 a.m. (London time) two Eurodollar Business Days
prior to the first day of such Interest Period.
"Eurodollar Rate Loans" shall mean Revolving Loans outstanding hereunder at
---------------------
such time as they are made and/or being maintained at a rate of interest based
upon the Eurodollar Rate.
44
"Eurodollar Reserve Percentage" shall mean with respect to an Interest
-----------------------------
Period for a Eurodollar Loan, the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves and taking into
account any transitional adjustments) which is imposed under Regulation D on
eurocurrency liabilities.
"Event of Default" shall have the meaning given such term in Paragraph 11
---------------- ------------
above.
"Existing Credit Agreement" shall have the meaning given such term in
-------------------------
Recital A above.
---------
"GAAP" shall mean generally accepted accounting principles in the United
----
States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state or
----------------------
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantors" shall have the meaning given such term in the introductory
----------
paragraph to this Agreement.
"Hazardous Materials" shall mean:
-------------------
(a) "Hazardous substances", "hazardous wastes," "hazardous materials,"
or "toxic substances," as defined in any of the Hazardous Material Laws;
(b) Any pollutant or contaminant, or hazardous, dangerous or toxic
chemical, material, waste or substance ("pollutant") which Hazardous
Material Laws prohibit, limit or otherwise regulate as to use, exposure,
release, generation, manufacture, sale, transport, handling, storage,
treatment, reuse, presence, disposal or recycling;
(c) Petroleum, crude oil or any fraction of petroleum or crude oil;
(d) Any radioactive material, including any source, special nuclear or
by-product material, as defined at 42 U.S.C. (S)2011 et seq., and
------
amendments thereto and reauthorizations thereof;
(e) Asbestos-containing materials in any form or condition; and
(f) Polychlorinated biphenyls.
"Hazardous Materials Claims" shall mean any enforcement, cleanup, removal
--------------------------
or other governmental or regulatory action or order with respect to the
Property, pursuant to any Hazardous Materials Laws, and/or any claim asserted in
writing by any third party relating to
45
damage, contribution, cost recovery compensation, loss or injury resulting from
any Hazardous Materials.
"Hazardous Materials Laws" shall mean any applicable federal, state or
------------------------
local laws, ordinances or regulations relating to Hazardous Materials.
"Indebtedness" of any Person shall mean all items of indebtedness which, in
------------
accordance with GAAP and practices, would be included in determining liabilities
as shown on the liability side of a balance sheet of such Person as of the date
as of which indebtedness is to be determined, including, without limitation, all
obligations for money borrowed and capitalized lease obligations, and shall also
include all indebtedness and liabilities of others assumed or guaranteed by such
Person or in respect of which such Person is secondarily or contingently liable
(other than by endorsement of instruments in the course of collection) whether
by reason of any agreement to acquire such indebtedness or to supply or advance
sums or otherwise.
"Interest Expense" shall mean for any period, interest accrued or paid to
----------------
the extent not accrued in a prior period by the Parent and its Subsidiaries for
such period (including, without limitation, capitalized interest with respect to
Indebtedness, facility fees, commitment fees and similar fees incurred in
connection with the borrowing of money).
"Interest Period" shall mean with respect to any Revolving Loan which is
---------------
being maintained as a Eurodollar Rate Loan, the period commencing on the date
such Revolving Loan is advanced and ending one, two or three months thereafter,
as designated in the related Loan Request; provided, however, that (a) any
Interest Period which would otherwise end on a day which is not a Eurodollar
Business Day shall be extended to the next succeeding Eurodollar Business Day
unless by such extension it would fall in another calendar month, in which case
such Interest Period shall end on the immediately preceding Eurodollar Business
Day, (b) any Interest Period which begins on a day for which there is no
numerically corresponding day in the calendar month in which such Interest
Period is to end shall, subject to the provisions of clause (a) above, end on
the last day of such calendar month, and (c) no Interest Period shall end after
the regularly scheduled Revolving Loan Maturity Date.
"Interim Date" shall mean March 31, 1997.
------------
"Investments" shall mean all expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described in Indebtedness),
or obligations of, any Person. In determining the aggregate amount of
Investments outstanding at any time: (a) the amount of any Investment
represented by a guaranty shall be taken at not less than the principal amount
of the obligations guaranteed and still outstanding, (b) there shall be included
as an Investment all interest accrued with respect to Indebtedness constituting
an Investment unless and until such interest is paid, (c) there shall be
deducted in respect of each such Investment any amount received as a return on
capital (but only by repurchase, redemption, retirement, repayment, liquidating
dividend or liquidating distribution), (d) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise,
46
except that accrued interest included as provided in the foregoing clause (b)
may be deducted when paid, and (e) there shall not be deducted form the
aggregate amount of Investments any decrease in the value thereof.
"L/C Documents" shall mean any and all documents, instruments and
-------------
agreements as the L/C Issuing Bank may require be delivered to it as a condition
precedent to the issuance by the L/C Issuing Bank of a Letter of Credit.
"L/C Drawing" shall mean any drawing under a Letter of Credit.
-----------
"L/C Issuing Bank" shall mean that Bank which has agreed, with the consent
----------------
of the remaining Banks, to issue the Letters of Credit, with the initial L/C
Issuing Bank being BankBoston.
"Letter of Credit" shall have the meaning given such term in Paragraph 2(a)
---------------- --------------
above.
"Letter of Credit Application" shall mean an application for the issuance
----------------------------
of a Letter of Credit in form satisfactory to the L/C Issuing Bank.
"Leverage Ratio" shall mean the ratio computed as provided in Paragraph
-------------- ---------
10(k) above.
-----
"Lien" shall mean any security interest, mortgage, pledge, lien, claim on
----
property, charge or encumbrance (including any conditional sale or other title
retention agreement), any lease in the nature thereof, and the filing of or
agreement to give any financial statement under the Uniform Commercial Code of
any jurisdiction.
"Loan Documents" shall mean this Agreement, the Replacement Notes, the
--------------
Security Documents, the Amended and Restated Guaranties, the Letters of Credit,
the Letter of Credit Applications and other L/C Documents and each other
document, instrument or agreement executed by the Company in connection herewith
or therewith, as any of the same may be amended, extended or replaced from time
to time.
"Loan Request" shall mean a request for a Revolving Loan in form
------------
satisfactory to the Agent.
"Majority Banks" shall mean the Banks holding not less than sixty-seven
--------------
percent (67%) of the Percentage Shares.
"Maximum Commitment" shall mean for any Bank at any date, the dollar amount
------------------
specified as such Bank's "Maximum Commitment" on the current Commitment
Schedule, as such amount may be increased or decreased by written agreement of
the Company, the Agent and one hundred percent (100%) of the Banks, with each
Bank's initial Maximum Commitment being set forth on Schedule 2 hereto.
----------
47
"Metropolitan" shall mean Metropolitan Life Insurance Company, a New York
------------
corporation.
"Metropolitan Obligations" shall have the meaning given such term in each
------------------------
of the Security Documents.
"Mortgages" shall mean those real property mortgages described more
---------
particularly on Exhibit O attached hereto and any other mortgages or deeds of
---------
trust that may subsequently be executed and delivered by the Company to the
Security Agent, as any of the same may be amended, extended or replaced from
time to time.
"Multiemployer Plan" as to any Person shall mean a Plan of such Person
------------------
which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Obligations" shall mean any and all debts, obligations and liabilities of
-----------
the Company to the Banks (whether now existing or hereafter arising, voluntary
or involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created or incurred),
arising out of or related to the Loan Documents.
"Other Permitted Asset Sales" shall mean sales of those assets described on
---------------------------
Exhibit P attached hereto.
---------
"Other Permitted Debt" shall mean Indebtedness described on Exhibit Q
-------------------- ---------
attached hereto.
"Other Permitted Guaranties" shall mean those guaranties described on
--------------------------
Exhibit R attached hereto.
---------
"Other Permitted Investments" shall mean Investments described on Exhibit S
--------------------------- ---------
attached hereto.
"Other Permitted Secured Debt" shall mean Indebtedness described as such on
----------------------------
Exhibit Q attached hereto.
---------
"Outstanding" shall mean with respect to Letters of Credit, any Letter of
-----------
Credit which has not been canceled, expired unutilized or fully drawn upon and
reference to the "amount" of any Outstanding Letter of Credit shall be deemed to
mean the amount available for drawing thereunder.
"Parent Pledge Agreement" shall mean the pledge agreement attached hereto
-----------------------
as Exhibit T, as the same may be amended, extended or replaced from time to
---------
time.
"Participant" shall have the meaning given such term in Paragraph 13(h)(2)
----------- ------------------
above.
48
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Percentage Share" shall mean, for any Bank at any date that percentage
----------------
which such Bank's Maximum Commitment bears to the Revolving Loan Credit Limit,
as set forth on the most recent Commitment Schedule, with the initial Percentage
Shares of the Banks being set forth on Schedule 2 attached hereto.
----------
"Person" shall mean any corporation, natural person, firm, joint venture,
------
partnership, limited liability company, trust, unincorporated organization,
government or any department or agency of any government.
"Plan" shall mean as to any Person, any pension plan that is covered by
----
Title IV of ERISA and in respect of which such Person or a Commonly Controlled
Entity of such Person is an "employer" as defined in Section 3(5) of ERISA.
"Potential Default" shall mean an event which but for the lapse of time or
-----------------
the giving of notice, or both, would constitute an Event of Default.
"Property" shall mean, collectively and severally, any and all real
--------
property, including all improvements and fixtures thereon, owned or occupied by
the Company or any of its Subsidiaries.
"Regulation D" shall mean Regulation D of the Board of Governors of the
------------
Federal Reserve System (12 C.F.R. (S) 221), as the same may from time to time be
amended, supplemented or superseded.
"Replacement Notes" shall have the meaning given such term in Paragraph
----------------- ---------
4(a) above.
----
"Reportable Event" shall mean a reportable event as defined in Title IV of
----------------
ERISA, except actions of general applicability by the Secretary of Labor under
Section 110 of ERISA.
"Required Principal Payments of Debt" shall mean for any period all
-----------------------------------
regularly scheduled payments on account of Indebtedness for borrowed money and
capitalized lease obligations during such period, it being expressly agreed and
understood that in no event shall "regularly scheduled payments" include the
aggregate $9,000,000.00 of principal payments due on the Metropolitan
Obligations from July 1996 through July 1997, regardless of when paid, or
otherwise regularly scheduled payments due during such period which are prepaid
as permitted hereunder during a previous period.
"Requirements of Law" shall mean as to any Person the Certificate of
-------------------
Incorporation and ByLaws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or a final and binding
determination of an arbitrator or a
49
determination of a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Revolving Loan" shall have the meaning given such term in Paragraph 1(a)
-------------- -------------
above.
"Revolving Loan Credit Limit" shall mean $20,000,000.00, as such amount may
---------------------------
be increased or decreased by written agreement of the Agent, the Company and one
hundred percent (100%) of the Banks.
"Revolving Loan Maturity Date" shall mean the earlier of: (a) June 27,
----------------------------
2000, as such date may be extended from time to time in writing by one hundred
percent (100%) of the Banks, in their sole discretion, and (b) the date the
Banks terminate their obligation to make further Revolving Loans hereunder
pursuant to Paragraph 11 above.
------------
"Secured Parties" shall have the meaning given such term in each of the
---------------
Security Documents.
"Security Agent" shall have the meaning given such term in the introductory
--------------
paragraph hereof and shall include any successor to Sumitomo as the initial
"Security Agent" hereunder.
"Security Documents" shall mean, collectively and severally, the Company
------------------
Security Documents, the Parent Pledge Agreement and the Big Wave Security
Agreement.
"Single Employer Plan" shall mean as to any Person any Plan of such Person
--------------------
which is not a Multiemployer Plan.
"Statement Date" shall mean December 30, 1996.
--------------
"Subsidiary" shall mean with respect to any Person, any corporation more
----------
than fifty percent (50%) of the stock of which having by the terms thereof
ordinary voting power to elect the board of directors, managers or trustees of
such corporation shall, at the time as of which any determination is being made,
be owned by such Person, either directly or through Subsidiaries of such Person
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency).
"Total Funded Debt" shall mean for any Person all Indebtedness for borrowed
-----------------
money, capitalized lease obligations and contingent liabilities with respect to
issued and outstanding letters of credit.
"Trademark Notice" shall mean that notice attached hereto as Exhibit U, as
---------------- ---------
the same may be amended, extended or replaced from time to time.
"6.69% Notes" shall mean the 6.69% Senior Secured Notes issued by the
-----------
50
Company to Metropolitan pursuant to the 6.69% Note Purchase Agreement.
"6.69% Note Purchase Agreement" shall mean that certain Note Purchase and
-----------------------------
Guarantee Agreement dated as of December 30, 1993 among the Company, the
Guarantors and Metropolitan, as amended from time to time with the consent of
the Banks.
"10.40% Notes" shall mean the 10.40% Senior Secured Notes issued by the
------------
Company to Metropolitan pursuant to the 10.40% Note Purchase Agreement.
"10.40% Note Purchase Agreement" shall mean that certain Note Purchase and
------------------------------
Guarantee Agreement dated as of July 24, 1990 among the Company, the Guarantors
and Metropolitan, as amended and restated pursuant to that certain Amended and
Restated Note Purchase and Guarantee Agreement dated as of December 30, 1993, as
further amended from time to time with the consent of the Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
CHART HOUSE, INC.
By: /s/ XXXXX X. XXXXXXX
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President, Treasurer &
Assistant Secretary
CHART HOUSE ENTERPRISES, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President-Finance, &
Chief Financial Officer
BIG WAVE, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President, Treasurer &
Assistant Secretary
51
BANKBOSTON, N.A., as the Agent and as a Bank
By: /s/ XXXXXX X. XXXXXX, XX.
-------------------------
Xxxxxx X. Xxxxxx, Xx.,
Director
THE SUMITOMO BANK OF CALIFORNIA,
as the Security Agent and as a Bank
By: /s/ XXXXXXX XXX XXXXXXXXXX
--------------------------
Xxxxxxx Xxx Xxxxxxxxxx,
Vice President
52
